TheCorporateCounsel.net

At the end of last month, the SEC submitted its fiscal 2026 budget request to Congress. As SEC Chairman Paul Atkins said in his statement before the House Appropriations Subcommittee on Financial Services and General Government, the agency’s request for $2.149 billion for SEC operations is flat compared to both the FY 2025 and FY 2024 funding levels.

The budget anticipates approximately 4,100 full-time equivalents (FTEs), representing a net reduction of 447 FTEs compared to fiscal 2025 levels. Taking a look at the budget justification (thanks to the Daily Update from Securities Docket for highlighting!), it appears that the Enforcement Division is expected to be down to approximately 83% of its fiscal 2024 staffing levels, while Corp Fin staffing levels are expected to be around 86%.

Why then is the budget flat compared to prior years? Chairman Atkins’ statement notes that about $100 million is included in case the SEC absorbs the PCAOB’s functions:

At this lower FTE level, the budget request actually is approximately $100 million more than the amount that would be required to maintain our current state of operations. There is some uncertainty regarding the FY 2026 budget, including the potential transfer of the functions of the Public Company Accounting Oversight Board (PCAOB) into the SEC. If Congress approves this budget request, we anticipate that this funding could support such a transfer of the PCAOB functions into the SEC in FY 2026.

I was curious how this $100 million compares to the PCAOB’s current operating budget, so I Googled it. According to Reuters, the PCAOB’s 2025 budget was almost $400 million, which is not funded through the federal budget. It is funded by accounting support fees that would be eliminated by merging the PCAOB’s responsibilities into the SEC, meaning, as Dan Goelzer notes, future appropriations would be needed in perpetuity to support the SEC’s ability to do this work.

– Meredith Ervine