Dear Jason,
Thank you for discussing a very compelling issue. However, I disagree with your article in terms of how “facts” are presented (rather than whether the SEC is underfunded). Let me disclose immediately that I work for a European financial watchdog (UK FSA).

I don't know whether SEC’s budget is appropriate for ensuring that the Commission is able to meet its statutory objectives. You may be perfectly right and the SEC could be underfunded, however your numbers are of little help, if any to understand the issue. On the contrary, your list of “facts” is confusing and the article is well, well below the minimum acceptable standard of quality I expect from the organization I’m very happy to belong to.

First of all, you rather clumsily put together fancy numbers without giving any useful benchmark. What is an appropriate number for some of the ratios you provide above?

Secondly, as well noted by one commenter above, the SEC is one of the many regulators and authorities that regulate and oversee some of the institutions and markets you list above (the SEC for example is not a prudential regulator for banks). Once you have provided a sensible benchmark as discussed above, please put together all the numbers and include the budget of other regulators as appropriate. You simply, and with great confidence, assume that the consolidated budget would still be absurdly low.

Thirdly, you could have done a cross country comparison and see whether the SEC is underfunded as compared to say the UK FSA, the French AMF, the Australian ASIC and others (accounting for the diversity in objectives and size/structure of their domestic markets).

Lastly, I assume that while you “carefully considered the issue for many years”, you did not notice that some important market regulators are funded by the industry. Why is self-funding inappropriate? It may be but, as for the rest of the article, you don’t provide any explanation.

Best regards
Fabio Braga