US president Donald Trump's administration plans to eliminate the part of the Securities and Exchange Commission budget that it has used to help identify insider traders and pursue enforcement.
A line in the budget proposed by the White House last week would scrap the $50 million annual "Reserve Fund" created by Congress after the financial crisis.
The SEC has used the fund to modernise its technology and, according to Mary Jo White, who chaired the SEC until January, needs "the ability to fully use the Reserve Fund in order to discharge its critical responsibilities".
Some Republicans in Congress have condemned the money as a slush fund.
Taxpayer
The budget proposes “to restore the [SEC’S] accountability to the American taxpayer by eliminating the “Reserve Fund” created by the Dodd-Frank Act”.
The SEC declined to comment.
A July 2015 report by the SEC’s inspector general warned that, without the fund, “the SEC would not have the capability to ingest, mine and use large data sets to meet its oversight mission”.
The SEC said a $25 million cut to the fund in 2014 had forced it to postpone upgrades that would have allowed it to analyse high-frequency trading activities.
– (Copyright The Financial Times Limited 2017)
