Lee A. Pickard served as director, Division of Market Regulation, Securities and Exchange Commission, from 1973 to 1977. He is a partner at Pickard and Djinis.

The White House's 1992 budget gives the Securities and Exchange Commission a budgetary increase on the order of 20 percent. At first impression, this appears to be a hefty increase in these difficult times. However, it may be money well spent, considering the SEC's responsibility to oversee the integrity of our securities markets . . . .

Financial intermediaries regulated by the SEC -- broker-dealers, investment advisers and mutual funds, for example -- have experienced very few insolvencies over the past several years, unlike the savings and loan and banking industries, where literally hundreds of billions of dollars of public monies have been lost due to insolvencies. The SEC wants more funding to oversee the financial integrity of the stock market and its professionals. It also wants to engage in more intensive "risk assessment" of the markets and their participants with an objective of avoiding the type of debacle we have experienced with depository institutions.

Moreover, the SEC is being confronted with an array of new financial products and trading techniques . . . . This is going to require that they have the personnel and resources to both understand these products and trends and fashion a proper regulatory response.

As an agency, the SEC has little authority to pass upon the economic merit of new products or trading patterns such as program trading and index futures. Nevertheless, it must have the capacity to understand these developments and ensure that investor confidence is maintained and small investors are treated fairly.