SEC cites budgetary uncertainty in decision to slow work on new offices

The Securities and Exchange Commission has put the brakes on its new whistleblower office and four other new offices authorized by the Dodd-Frank financial reform law, saying it needs additional budget authority from Congress before moving forward.

The agency cited "budgetary uncertainty" as the reason why the creation of the offices have now been filed under the "dates to be determined" section of its website. The SEC will provide more specific information about the timeline for the creation of those offices after the fiscal 2011 budget is adopted, it said.

That means, however, the SEC is resting its hope for more funds on a resurgent GOP, which will take over the House of Representatives in January and was largely critical of the financial reform effort. That skepticism, coupled with the desire to meet campaign pledges to cut into the federal deficit, may mean Republicans will be reluctant to cut a larger check to finance the SEC's efforts.

Although Dodd-Frank stated the SEC's budget would balloon to $2.25 billion by 2015 from $1.3 billion in 2011, that money still needs to be appropriated via the congressional budgeting process.

The whistleblower office has attracted significant attention, as the SEC prepares to handle tips from market participants who could reap rewards into the millions of dollars if their information leads to significant monetary sanctions.

If a whistleblower's information leads to sanctions totaling more than $1 million, that tipster will receive between 10 and 30 percent of the total amount.

Although the office has not been established yet, the SEC began accepting information as soon as Dodd-Frank was signed into law. Final regulations outlining the office must be completed by April 21.

The Office of Women and Minority Inclusion, the Investor Advisory Committee, the Office of Investor Advocate, the Office of Credit Ratings, and the Office of Municipal Securities were also delayed.