Drilling Down Into the SEC's Staff Growth Plans

If your career plans include working for a regulatory agency, SEC Chairman Mary Schapiro's House testimony this week is must reading. Major portions of her text detail SEC hiring plans and organizational changes the agency is making to implement the new Dodd-Frank reform law. Here's a rundown.

The law adds or expands SEC responsibilities for over-the-counter derivatives, credit rating agencies and private funds. It requires the panel to promulgate a large number of new rules, create five new offices, and conduct multiple studies, many within one year. The rulewriting process will be "extremely labor intensive," Schapiro observes.

The agency estimates it will need to add approximately 800 new positions over time in order to carry out its new or expanded responsibilities under the legislation.

Shapiro elaborates:

To accomplish the hiring of hundreds of new staff during the course of FY 2011, the SEC is enhancing its human resources staff and, consistent with its current authorities, streamlining its hiring process. Improvements include simplifying the application process and maintaining a searchable database of applicants, so that it is possible to interview for a vacancy as soon as it appears rather than having to go through the lengthy posting process each time. Being able to better tailor, target and speed recruiting will enhance the quality of applicants and help the agency acquire the necessary talent to perform effectively in an increasingly complex financial environment.

Other key points from her testimony:

- Reversing the Bush-era shrinkinge in headcount and budget, today the SEC has returned to levels of staffing and technology investments of five years ago.

- The $1.258 billion proposed SEC budget for the fiscal year starting Oct. 1 (up 12 percent from this year) would allow for 374 new hires, boosting headcount to 4,200.

- The proposed FY 2011 budget also includes $12 million added spending on IT projects. A top priority is the third phase of a new system for analyzing tips, complaints, and referrals. Other IT projects include improving surveillance, risk analysis, and case and exam management tools, modernizing the agency's financial systems, and implementing a new system for managing evidence obtained from investigations.

- The SEC has created and begun staffing a new division, the Division of Risk, Strategy, and Financial Innovation, which focuses on new products, trading practices, and risks. Schapiro says the body has "attracted, retained and continue to recruit financial, economic, and legal experts" who understand and have worked on financial innovations on Wall Street. It's also working to build a deeper reservoir of professionals with specialized industry expertise to conduct risk analysis and identify emerging trends and practices.

- The agency's Enforcement Division has reallocated a number of staff who were first-line managers to conduct front-line investigations, thereby eliminating a layer of management. That division also hired its first-ever managing executive, in charge of upgrading its administrative, operational, and infrastructure functions.

- The SEC hired a chief operating officer - also a new position, to provide leadership for IT, financial management, and records management.