SEC Investment Management Department loses nearly a quarter of staff in FY2025, regulatory capacity under pressure

Ask AI · How Does the Shortage of Regulatory Talent Impact the Stability of the Private Credit Market?

【Global Times Finance, Comprehensive Report】According to a report released by the U.S. Government Accountability Office (GAO), a watchdog agency under the U.S. Congress, on March 27 local time, the SEC’s Office of Investment Management—the core regulatory department—saw an employee attrition rate of as high as 24% in fiscal year 2025, nearly one in four, placing severe pressure on the agency’s professional capabilities in securities regulation.

The GAO report makes it clear that the department has already experienced “a loss of specialized capacity in rulemaking,” and a shortage of core regulatory talent has become increasingly prominent.

The report emphasizes that most departing employees “possess unique professional knowledge or have specialized skills in particular subfields.” The loss of such core talent may pose “a substantive risk to the SEC’s ability to carry out its statutory mission and conduct routine, ongoing supervision.”

This large-scale personnel outflow comes at a time when the U.S. private credit industry is entering a strong regulatory cycle. Against the backdrop of continued expansion in the private credit market, compliance reviews for relevant funds have been tightened across the board, and investors’ risk-avoidance sentiment has continued to rise. According to market news, major asset management institutions such as Apollo Global Management and Ares Management have recently, one after another, restricted investors’ ability to redeem funds from certain funds, and uncertainty in the industry has kept heating up.

Data show that the Office of Investment Management is the department within the SEC with the most serious employee attrition. In the same period, the SEC-wide employee attrition rate also reached 18%. The GAO report discloses that the SEC has a total size of about 5,000 people. In fiscal year 2025, 871 employees left the organization, including 599 who participated in a voluntary separation program.

According to a report by Bloomberg, this wave of SEC employee departures is highly related to the federal agency streamlining policies led by the “Department of Government Efficiency” (DOGE) promoted by Elon Musk, and is part of a broad personnel reshuffling across the U.S. federal government.

The GAO report further adds that after entering fiscal year 2026, the SEC rolled out a new round of voluntary early retirement and incentive compensation programs. Another 42 employees left through this program, and the personnel reduction trend continues.

In response to the issue of personnel outflow, an SEC spokesperson said that the current staffing levels are sufficient to support the agency’s day-to-day regulatory duties. SEC Chair Paul Atkins is fully pushing hiring efforts to ensure that staffing needs are filled in a timely manner. The spokesperson said that voluntary departures inject fresh blood into the team, and both new and veteran employees will work together to carry out the core responsibilities of protecting investors, promoting capital formation, and maintaining market fairness and efficiency. (Chen Shiyi)