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Featured Advisor

Ed Meek
CEO/Investment Advisor

Edge Portfolio Management


State: IL

At Edge, a low client to advisor ratio allows for personal and customized service for each individual.  Our goal is to work as a team for each client to provide not only portfolio management but wealth coordination and financial planning.  We make every effort to have frequent communication with our clients and to provide timely response to calls and emails.  I also enjoy spending time with my wife and three kids, playing and following basketball, playing golf, and participating as an advisory board member for Breakthrough Urban Ministries.

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SEC Strategies to Enforce Dodd-Frank Act

Huge burden to reform the U.S. financial industry

The U.S. Securities and Exchange Commission, the federal agency charged with protecting investors and maintaining fair financial markets, will need 468 new employees in the next fiscal year to implement the changes set forth in the Dodd-Frank Act.

The new hires will cost the agency about $123 million, SEC Chairman Mary Schapiro told Congress in early May. The agency will need another 300 employees in the 2013 fiscal year to fully implement the act.

“Enactment of the Dodd-Frank Act added significant new work to the Commission’s agenda, including more than 100 rulemaking provisions applicable to the SEC,” Schapiro told a Senate appropriations subcommittee. “To date, the Commission has issued 34 proposed rule releases, seven final rule releases and two interim final rule releases in connection with the Dodd-Frank Act.”

The Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law on July 21, 2010, came in response to the Great Recession that followed the collapse of the financial markets in 2007. The Act calls for sweeping changes to the nation’s financial system and places a particularly heavy burden on the SEC, an agency created by Congress in response to the Great Depression of 1929.

The act calls for increased SEC oversight for over-the-counter derivatives, hedge fund advisors, asset-back securities, credit rating agencies and corporate governance. The agency is also charged with creating a new whistleblower program and providing disclosures related to conflict minerals, mine safety and resource extraction.

At the same time the SEC is carrying out its core responsibilities of pursuing securities fraud, reviewing the financial statements of public companies and overseeing the activities of investment advisors and broker-dealers. The agency is currently operating at 2005 staffing levels, despite the enormous growth in the size and complexity of the securities market since then, Schapiro said.

Many key provisions in the Dodd-Frank Act have yet to be implemented, including a stricter fiduciary standard for broker dealers. SEC staff has indicated they will issue proposed rules on the controversial topic in the second half of 2011. The agency expects to address another hot topic, mutual fund fees paid to brokers, towards the end of 2012.

The U.S. Government Accountability Office estimates that in its first year of implementation Dodd-Frank will cost the 11 federal agencies a total of about $974 million, according to The Wall Street Journal. Using that as an annual baseline, the GAO estimates that Dodd-Frank implementation will cost about $2.9 billion over five years and require the agencies to hire more than 2,600 new full-time employees.