The Securities and Exchange Commission is requesting a 12.5% budget increase for 2005, to US$913 million for fiscal 2005.

The amount consists of US$893 million in new budget authority and US$20 million in anticipated balances from the prior year.

The SEC says this budget request — the first crafted by Chairman Donaldson since his arrival in February 2003 — would permit the regulator to hire 106 new employees and continue the agency’s recent management and operational initiatives.

The commission currently plans to use these staff to implement initiatives already underway, including the agency’s enhanced oversight of mutual funds, and market structure reform initiatives. It adds the should the SEC act to register hedge fund advisers, the additional staff would also be used for this purpose.

The request also would allow the SEC to continue implementing a variety of operational reforms, including investing additional funds in information technology, creating the new Office of Risk Assessment and Strategic Planning, and implementing risk-based disclosure reviews and compliance inspections and examinations. And, it would fund the agency’s previously announced new headquarters building at Station Place and is expected to keep staff salaries comparable with those of other federal financial regulatory agencies next year.

SEC chairman William Donaldson will testify before Congress in support of the President’s budget request for the commission this spring.