Friday, December 03, 2010

Citing Budgetary Concerns, SEC Puts on Hold the Whistleblower Office and other new Offices Mandated by Dodd-Frank

Due to budgetary uncertainty, the SEC has put on hold the creation and staffing of the Whistleblower Office and five other new Offices mandated by the Dodd-Frank Act. The functions that were to be performed by the Whistleblower Office, mandated by Section 924, have been temporarily assigned to existing Division of Enforcement staff. The new Whistleblower Office was assigned the duty of administering and enforcing the whistleblower provisions of Dodd-Frank and reporting annual to congressional oversight committees on the SEC’s response to whistleblower complaints.

Similarly, the creation and staffing of the Office of Investor Advocate, mandated by Section 915 of Dodd-Frank, has been deferred. Activities regarding investor perspectives in rulemaking will continue to be performed by staff in the existing Office of Investor Education & Advocacy until the new Office is up and running. The mandate of the new Office of Investor Advocate includes, according to Senator Dan Akaka, identifying areas where investors would benefit from changes in the policies of the SEC and the SROs.

The Office of Women and Minority Inclusion, mandated by Section 342, has also been deferred. Activities regarding diversity in hiring and small business contracting will continue to be performed by staff in the existing EEO Office.

Created by Section 932 of Dodd-Frank, the new Office of Credit Ratings will not be staffed at this time. Rulemaking functions remain with staff within the Division of Trading and Markets, while examination functions will continue to be performed by the Office of Compliance Inspections & Examination. The Office of Municipal Securities is deferred, with functions continuing to be assigned to staff within the Division of Trading and Markets. Finally, the new Investor Advisory Committee mandated by Section 911 will not be created until the budgetary uncertainty is resolved. Congress envisions that the Investor Advisory Committee will advise and consult with the SEC on regulatory priorities and issues regarding securities products and trading strategies, fee structures and disclosure.

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