PB - 1 

SEC Performance Budget for 2006 

In accordance with Section 220 of Office of Management and Budget Circular A-11, 

the SEC has crafted the following Performance Budget for 2006. This document aligns the 

goals and measures developed for the SEC’s Strategic Plan for Fiscal 2004-2009 with the 

SEC’s budget request. It aims to improve the linkages between the SEC’s resource needs, 

effectiveness, and outcomes, and is submitted in lieu of the agency’s Government 

Performance and Results Act Annual Performance Plan, as permitted by OMB. 

Separately, the SEC has had both its Division of Enforcement and Division of 

Corporation Finance scored by OMB’s Performance Assessment and Rating Tool (PART). 

The results of these assessments will be included in the President’s budget request for 2006. 

Goals and Outcomes

As established in the SEC’s strategic plan, the agency’s four goals are to: 

• Enforce compliance with federal securities laws; 

• Sustain an effective and flexible regulatory environment; 

• Encourage and promote informed investment decisionmaking; and 

• Maximize the use of SEC resources. 

The SEC works to meet these goals by, among other things, detecting potential 

problems or issues in the securities markets early to prevent violations of federal securities 

laws; crafting regulations that strengthen corporate and fund governance; providing investors 

with timely access to accurate and adequate disclosure materials that are useful, and can be 

easily understood and analyzed across companies, industries, or funds; and ensuring that the 

agency’s human capital strategies, information technology initiatives, and resources are 

appropriately aligned to achieve the agency’s mission, goals, and outcomes. 

In 2004, the SEC launched the “dashboards” initiative to measure its progress in 

achieving these goals. These internally-generated indicators provide useful information 

regarding the agency’s timeliness in completing certain tasks, its changing priorities, and the 

scope and breadth of its activities. This effort, along with ongoing managerial analyses and 

reviews of externally generated data, informed the development of the agency’s performance 

measures as shown in this Performance Budget. These measures are useful in helping SEC 

managers to determine how the SEC should allocate its budgetary resources. 

Like other federal regulatory and law enforcement agencies, the SEC has found it 

challenging to develop measures that accurately depict the outcomes of the agency’s activities. 

In many instances the agency’s impact can only be indirectly assessed. The SEC intends to 

continue refining its work in this area as it gains more experience in integrating its budget and 
PB - 2 

performance functions. As part of this effort, the SEC intends to implement a performancebased budgeting/activity-based costing system to help monitor operating costs, better allocate 

costs across business functions, and achieve greater cost efficiency. The agency also will 

continue to assess alternatives for measuring outcomes that help the public gauge the SEC’s 

progress in achieving its mission, as well as assist program officials in meeting their 

objectives. 

 
PB - 3 

Goal One: Enforce Compliance with Federal Securities Laws 

Performance Measure: 1. Investment advisers and investment companies examined. 

Description: To conduct oversight of investment companies and advisers, staff conducts routine 

exams, cause inspections to follow up on tips and complaints, and special inspections to probe 

emerging risk areas. The market timing and late trading problems in the mutual fund industry 

caused the form of the SEC’s oversight of investment companies and advisers to change and 

resulted in a greater number of cause inspections to investigate indications of possible wrongdoing. 

The number of special inspections increased significantly as the staff followed up on emerging 

areas of high risk through an extensive program of risk-targeted examination sweeps. 

 FY 

2001 

FY 

2002 

FY 

2003 

FY 2004 

Plan 

FY 2004 

Actual 

FY 

2005 

FY 

2006 

Investment Advisers 

 Examined 

Investment Companies 

 Examined 

1,405 

272 

1,570 

304 

1,556 

318 

-- 

-- 

1,543 

783 

1,400 

500 

1,400 

500 

FY 2006 Request: The number of inspections completed each year reflects the facts, 

circumstances, and priorities unique to that year. Therefore, the figures may differ from the SEC’s 

plan because of changes in priorities resulting from unforeseen events and conditions during a year. 

However, the emphasis on risk-targeted examinations is expected to continue as the agency refines 

its risk management practices. 
PB - 4 

Performance Measure: 2. Number and percentage of examinations finding “significant” 

violations. 

Description: Examiners find a wide range of violations during examinations. Some of these 

violations are more technical in nature, such as failing to include all information that is required to 

be in a record. Other violations may have caused harm to customers or clients of a firm or had a 

high potential to cause harm. These latter violations are among those categorized as significant. 

This measure will be implemented in 2005 and data is not available for prior years. 

 FY 2001 FY 2002 FY 2003 FY 2004 

Plan 

FY 2004 

Actual 

FY 

2005 

FY 

2006 

Fund/Adviser Exams 

 Number 

 Percent 

Broker/Dealer and 

SRO Exams 

 Number 

 Percent 

Data not 

available 

Data not 

available 

-- 

-- 

-- 

-- 

-- 

-- 

-- 

-- 

FY 2006 Request: The agency is not projecting the number of violations and significant findings it 

may identify during examinations. Emphasis will be on further collection of data and trend analysis 

of potential patterns of violations in the industry. 

Performance Measure: 3. Referrals to the Division of Enforcement from examination staff or 

the Division of Corporation Finance. 

Description: The SEC’s Division of Enforcement receives referrals from a variety of sources. For 

example, the examination staff and the Division of Corporation Finance’s disclosure review 

program both strive to uncover serious potential violations of the federal securities laws, among 

other objectives. When possible violations are found, they are referred to the Division of 

Enforcement for further investigation. This indicator measures the number of enforcement referrals 

from the exam staff and the Division of Corporation Finance within each fiscal year. 

 FY 2001 FY 2002 FY 2003 FY 2004 

Plan 

FY 2004 

Actual 

FY 

2005 

FY 

2006 

Examination Staff 

Corporation Finance 

Data not 

available 

Data not 

available 

Data not 

available

Data not 

available

171 

231 

--- 

--- 

482 

415 

--- 

--- 

--- 

--- 

FY 2006 Request: Targets are not used for this measure. 
PB - 5 

Performance Measure: 4. Percentage of first enforcement cases filed within two years. 

Description: This measure identifies the percentage of first enforcement actions filed within two 

years of opening the investigation or inquiry. In conducting investigations, the Division of 

Enforcement continually strives to balance the need for complete, effective, and fair investigations 

with the need to file enforcement actions in as timely a manner as possible. 

FY 2001 FY 2002 FY 2003 FY 2004 

Plan 

FY 2004 

Actual 

FY 2005 FY 2006 

Data not 

available 

Data not 

Available 

62% 52% 69% 54% 57% 

FY 2006 Request: The figures in this chart are dependent on the types of cases brought or 

emphasized in a specific year, as well as competing staff priorities, such as litigating actions already 

filed and bringing additional enforcement actions. 

Performance Measure: 5. Enforcement cases successfully resolved. 

Description: A case is considered “successfully resolved” if it resulted in a favorable judgment for 

the SEC, a settlement, or the issuance of a default judgment. In general, the SEC strives to 

successfully resolve as many cases as possible but, at the same time, aims to file large, difficult, or 

precedent-setting cases when appropriate, even if success is not assured. 

FY 2001 FY 2002 FY 2003 FY 2004 

Plan 

FY 2004 

Actual 

FY 2005 FY 2006 

Data not 

Available 

82% 98% 85% 87% 

FY 2006 Request: A continued high success ratio depends on numerous factors, including the 

complexity of cases, the extent to which parties contest actions, and the availability of litigation and 

investigation resources. 
PB - 6 

Performance Measure: 6. Monetary disgorgements and penalties ordered and the amounts 

and percentage collected by the SEC. 

Description: In addition to other types of relief, the Commission may seek orders requiring parties 

to disgorge any money obtained through wrongdoing. The Commission also is empowered to seek 

civil penalties for violations of the securities laws. Where appropriate, the Commission has sought 

to return disgorged funds to defrauded investors and, as a result of the “Fair Funds” provision of the 

Sarbanes-Oxley Act, to use amounts paid as penalties to reduce losses to injured parties. Funds not 

returned to investors are sent to the U.S. Treasury; neither disgorgements nor penalties go to the 

SEC. This chart lists disgorgements and penalties ordered to and collected by the SEC. 

 FY 2001 FY 2002 FY 2003 FY 2004 

Plan 

FY 2004 

Actual 

FY 

2005 

FY 

2006 

 Ordered 

 Collected 

 Percentage 

Data not 

Available 

Data not 

Available

$313M 

$141M 

45% 

-- 

-- 

-- 

$1.3B 

$924M 

71% 

-- 

-- 

-- 

-- 

-- 

-- 

FY 2006 Request: The agency does not make projections for this measure. The amount of 

disgorgements and fines may vary widely year to year, and collection success rates depend on 

numerous variables, including the financial status and size of the parties sued. 

Performance Measure: 7. Number of requests to and by foreign regulators for enforcement 

assistance. 

Description: The Office of International Affairs helps the Division of Enforcement contend with 

international issues arising from its investigations and cases and seek enforcement-related cooperation 

from foreign securities regulators. This measure gauges the level of international cooperation on 

enforcement matters, identifying the number of requests that OIA sent to other regulators and the 

number of incoming requests from foreign regulators seeking assistance with their own cases. 

 FY 

2001 

FY 

2002

FY 2003 FY 2004 

Plan 

FY 2004 

Actual 

FY 

2005

FY 

2006 

Requests To Foreign Regulators 

Requests From Foreign 

Regulators 

364 

483 

448 

353 

309 

344 

330 

360 

380 

372 

420 

410 

440 

430 

FY 2006 Request: The number of requests between regulators is expected to rise gradually through 

2006. 
PB - 7 

Performance Measure: 8. Distribution of Cases Across Core Enforcement Areas. 

Description: Effective deterrence of securities fraud requires that the cases filed by the SEC have 

adequate reach across all core enforcement program areas. The mix and types of cases filed by the 

agency changes year to year based upon the conditions of the markets and the changes in financial 

instruments being used. The SEC’s enforcement program seeks to maintain a presence and depth 

so that no single area dominates its case mix, nor is underrepresented. This measure evaluates 

whether the agency maintains an effective distribution of cases so that no category exceeds 40% of 

the total. 

Core Enforcement 

Program Areas 

FY 2003 

Percentage of 

Cases 

FY 2004 

Percentage of 

Cases 

FY2005 FY2006 

Market Manipulation 

Insider Trading 

Financial Disclosure 

Investment Advisers and 

 Investment Companies 

Broker Dealer 

Securities Offering 

Other 

5% 

7% 

29% 

11% 

20% 

16% 

12% 

6% 

7% 

28% 

14% 

22% 

15% 

8% 

<40% 

<40% 

<40% 

<40% 

<40% 

<40% 

<40% 

<40% 

<40% 

<40% 

<40% 

<40% 

<40% 

<40% 

FY 2006 Request: The agency will maintain a presence across all core enforcement program 

areas. Targets are not used for individual enforcement program areas. 
PB - 8 

Goal Two: Sustain a Flexible and Effective Regulatory Environment 

Performance Measure: 1. Milestones achieved for high-priority rule makings. 

Description: In 2004, the Commission and staff engaged in extensive rulemaking to address 

issues of corporate and fund governance and to address provisions of the Sarbanes-Oxley Act. New 

standards for the governance policies and practices of SROs and participants in the investment 

management industry will have significant effects for years to come. 

 FY 2005 FY 2006 

Investment Management 

Address Mutual Fund Late Trading 

Redemption Fees for Mutual Funds 

Hedge Fund Adviser Registration 

Changes to Adviser Disclosure Documents 

Mutual Fund Transaction Cost Disclosure 

Broker-Dealer Exemption 

Soft Dollars 

Revamp Fund Disclosure Regime 

Review and Update PUHCA Forms 

Evaluate Changes to Rule 12b-1 

Corporation Finance 

Shareholder Nomination Process 

Asset Backed Securities 

Shell Companies 

Offering Communications 

Disclosures of Executive Compensation, Board 

 Independence, & Related Party Transactions 

Company Communications with Owners of 

 Securities Held in Street or Nominee Name 

Tagged Data 

Transition to IFRS Accounting Standards 

Market Regulation 

Point-of-Sale Disclosure/Confirmation 

 Requirements 

National Market System (Reg NMS) 

Short Sale Regulation (Reg SHO) 

Regulation B 

SRO Governance Reporting Rules 

Net Capital Rule Revisions 

Final Action 

Final Action 

Final Action 

(Adopted in Dec. ‘04) 

Final Action 

Propose 

Final Action 

Propose 

Final Action 

Final Action 

Final Action 

Propose & Final Action 

Propose 

Concept Release 

& Propose 

Propose Concept Release 

Final Action 

Final Action 

Final Action & Implement 

Implement Pilot 

Final Action 

Final Action 

Propose 

Implement 

Implement 

Implement 

Final Action 

Final Action 

Decide Whether 

to Propose 

Propose 

Additional Rules 

Evaluate 

Evaluate 

Implement 

Implement 

Final Action 

FY 2006 Request: The agency’s rulemaking agenda for 2005 and 2006 may change, perhaps 

substantially, in response to market developments and evolving agency priorities. 
PB - 9 

Performance Measure: 2. Percentage of responses to exemptive, no-action letter, and 

interpretive requests issued within six months. 

Description: Commission staff respond to inquiries from individuals or companies about whether 

an activity undertaken in a specified manner would violate the securities laws. The inquiries take 

the form of written requests that the staff not recommend enforcement or other action to the 

Commission if the activity is completed as specified. The originators of “no-action” requests 

submit their inquiries privately, but the staff publicly releases both the request and the agency’s 

response upon completion. Staff also respond to requests to interpret specific provisions of the 

securities rules and review applications for exemptions from the securities laws. 

FY 2001 FY 2002 FY 2003 FY 2004 

Plan 

FY 2004 

Actual 

FY 2005 FY 2006 

Data not available 84% 85% 85% 

FY 2006 Request: The agency intends to maintain its response rate. 

Performance Measure: 3. Percentage of SRO rule filings closed in less than 60 days. 

Description: SRO rule changes are reviewed for consistency with investor protection and market 

operation and structure rules that govern the operation of registered national securities exchanges, 

clearing agencies, and the automated quotation systems operated by the NASD and Municipal 

Securities Rulemaking Board. The figures below represent the percentage of proposed SRO rules 

changes reviewed (i.e., approved or disapproved) within 60 days from receipt of the last amendment 

filed by the SRO. 

 

FY 2001 FY 2002 FY 2003 FY 2004 

Plan 

FY 2004 

Actual 

FY 2005 FY 2006 

Data not 

available 

Data not 

available 74% 75% 78% 75% 75% 

FY 2006 Request: The percentage of SRO rule filings closed in under 60 days will remain steady 

despite an increasing number of rule filings received, due in part to additional staff and the 

implementation of an electronic rule filing system. 
PB - 10 

Performance Measure: 4. Global access to U.S. markets: Number of new foreign private 

issuers registering under the Securities Act of 1933 and the Securities Exchange Act of 1934, 

and the dollar amount of securities registered by foreign private issuers (in billions). 

Description: The number of foreign companies registering stocks in the U.S. and the amount of 

money they bring to the public markets can be viewed as an indicator of the integrity, liquidity, and 

fairness of the U.S. markets. 

 FY 

2001 

FY 

2002 

FY 

2003 

FY 2004 

Plan 

FY 2004 

Actual 

FY 

2005 

FY 

2006 

Companies 

Dollar value 

130 

$267 

70 

$147 

50 

$163 

110 

$120 

63 

$146 

60 

$145 

60 

$145 

FY 2006 Request: Because of the uncertain market and economic conditions, projections of 

transactional filings (i.e., filings relating to capital raising or business combinations) in 2005 and 2006 

have been assumed to approximate 2004 levels. 

Performance Measure: 5. Percentage of households owning mutual funds. 

Description: Near record numbers of Americans continue to invest in the U.S. securities markets 

through the purchase and sale of stocks, bonds, and mutual funds. In particular, the number and 

percentage of U.S. households that own mutual funds grew dramatically during the 1990s as stock and 

bond mutual funds became a key repository for U.S. savings dollars. These data are derived from a 

survey of approximately 3,000 households conducted by the Investment Company Institute. Results 

have a standard error of +/- 1.8% at the 95% confidence level. The sample is weighted to match the 

age distribution of the U.S. population. The number of U.S. households is based on the most recent 

estimate by the U.S. Bureau of the Census. 

FY 2001 FY 2002 FY 2003 FY 2004 

Plan 

FY 2004 

Actual 

FY 2005 FY 2006 

52% 49.6% 47.9% --- 48.1 --- --- 

FY 2006 Request: Targets are not set for this measure.
PB - 11 

Goal Three: Encourage and Promote Informed Investment Decisionmaking

Performance Measure: 1. Percentage of corporations and investment companies reviewed 

each year in a three-year cycle. 

Description: Sarbanes-Oxley mandates the review of all corporations and investment companies 

once every three years. The reviews will facilitate adequate and accurate disclosure of information 

and provide investors with timely access to material information about emerging and novel issues 

affecting a corporation or investment company. 

 FY 2001 FY 2002 FY 

2003 

FY 2004

Plan 

FY 2004 

Actual 

FY 

2005 

FY 

2006 

Corporations 

Investment Companies 

Data not 

available

Data not 

available

23% 

10% 

24% 

44% 

22% 

54% 

36% 

35% 

38% 

37% 

FY 2006 Request: The agency will maintain its review cycle to ensure that corporations and 

investment companies are reviewed at least once every three years. 

Performance Measure: 2. Number of corporate disclosure filings “significantly” improved by 

staff comments, and number of “significant” actions taken by disclosure review staff to 

protect investment company shareholders. 

Description: For corporate filings, comments are issued to elicit better compliance with applicable 

disclosure requirements and improve the information available to investors. In many instances, 

amendments involve financial restatements. The determination of “significance” stems from the 

nature of the change (e.g., restating positive income as a loss) or the size of the company. With 

respect to investment company filings, the staff take actions to elicit better compliance with 

applicable disclosure requirements, improve the information available to investors, and ensure that 

fund investment, marketing, and operational activities as described in disclosure documents are 

conducted in accordance with federal law. 

 FY 2001 FY 2002 FY 

2003 

FY 2004

Plan 

FY 2004 

Actual 

FY 

2005 

FY 

2006 

Corporate Filings 

Investment Company 

Filings 

Data not available 

Data not available 

-- 

-- 

-- 

-- 

FY 2006 Request: Data for this measure will become available in 2005. Targets are not used for 

this measure. 
PB - 12 

Performance Measure: 3. Percentage of investment adviser and investment company 

transactional reviews completed within timeliness goals. 

Description: For initial registration statements, the SEC’s goal is to comment within 30 days after 

they are filed (60 days for registration statements of insurance product separate accounts). For posteffective amendments, the goal is to comment within 45 days after they are filed. For preliminary 

proxy statements, the goal is to comment within ten days after they are filed. 

 FY 2001 FY 2002 FY 

2003 

FY 

2004 

Plan 

FY 

2004 

Actual 

FY 

2005 

FY 

2006 

Initial Registration Statements 

Post-Effective Amendments 

Preliminary Proxy Statements 

Data not 

available 

Data not 

available

81% 

86% 

100% 

85% 

90% 

99% 

88% 

98% 

100% 

85% 

90% 

99% 

85% 

90% 

99% 

FY 2006 Request: As a benchmark, the staff aims under normal circumstances to provide 

comments within timeliness goals for at least 85% of registration statements, 90% of post-effective 

amendments, and 99% of preliminary proxy statements. The staff anticipates that it will continue to 

achieve its performance benchmarks in 2006. 

Performance Measure: 4. Average time to issue initial comments on Securities Act filings. 

Description: The target of 30 days has become a de facto industry standard for the maximum time 

to receive SEC comments. Companies often build this timeframe into their plans. The 30 days is 

considered aggressive given the other mandatory reviews the agency conducts and the fluctuation in 

filing volume that impacts workload plans. 

FY 2001 FY 2002 FY 2003 FY 2004 

Plan 

FY 2004 

Actual 

FY 2005 FY 2006 

Data not 

available 

Data not 

available 

27.7 days 30 days 27.8 days 30 days 30 days 

FY 2006 Request: The agency intends to maintain its timeliness goal in order to provide staff 

sufficient time to identify areas of concern without significantly impacting the financing schedules of 

issuers. 
PB - 13 

Performance Measure: 5. Annual number of on-line searches for EDGAR filings. 

Description: Greater availability of market-sensitive information through the SEC’s EDGAR 

system provides investors with the ability to make more informed investment decisions. This 

measure gauges the demand for EDGAR data through the SEC website. 

FY 2001 FY 2002 FY 2003 FY 2004 

Plan 

FY 2004 

Actual 

FY 2005 FY 2006 

52,265,392 96,931,859 141,508,835 205,000,000 288,959,364 425,000,000 615,000,000 

FY 2006 Request: The SEC anticipates that demand for the disclosure data from EDGAR will 

increase as improvements are made to the SEC website and the agency’s data tagging initiative is 

implemented. 

Performance Measure: 6. Percentage of forms and submissions filed electronically and in a 

structured format. 

Description: The agency is continuing its emphasis on electronic filing to make information 

available to the public in a format that can be easily obtained and analyzed. The SEC currently has 

over 100 forms that must be filed with the agency. These forms generate hundreds of thousands of 

filings with the SEC. This measure identifies the percentage of forms that are in electronic format 

and the percentage of resulting filings that are received electronically by the SEC. The agency is 

redesigning its form filing capabilities to rely on more structured formats (e.g., information is 

captured in a comma delimited, XML, or XBRL or other format). This measure also gauges the 

percentage of forms that are available to be filed in a structured format and the percentage of 

resulting filings that are received in the structured format. 

 FY 

2001

FY 

2002

FY 

2003

FY 2004

Plan 

FY 2004 

Actual 

FY 

2005

FY 

2006 

Electronic Filings 

 % of forms in electronic format 

 % of filings received electronically 

Structured Filings 

 % of forms in structured format 

 % of filings received in structured 

 format 

Data not 

available 

Data not 

available 

FY 2006 Request: Data for this measure will be available in 2005. 
PB - 14 

Performance Measure: 7. Number and percentage investor complaints, questions, and 

requests completed by the Office of Investor Education (OIEA) within seven calendar days. 

Description: OIEA serves the tens of thousands of investors who contact the SEC each year with 

investment-related complaints and questions. A substantial portion of the complaints received 

require input from the entities involved and cannot be resolved in less than 30 to 60 days. 

Nevertheless, the staff aims to close out as many new matters as possible within seven calendar 

days. 

 FY 2001 FY 2002 FY 2003 FY 2004 

Plan 

FY 2004 

Actual 

FY 2005 FY 

2006 

Received 

Closed 

Closed <7 days 

Percentage 

70,187 

71,041 

53,870 

76% 

82,337 

81,748 

64,818 

79% 

70,574 

71,373 

58,133 

81% 

71,864 

71,847 

58,928 

82% 

73,481 

73,415 

60,688 

83% 

72,000 

72,000 

60,000 

83% 

72,000 

72,000 

61,200 

84% 

FY 2006 Request: The volume of investor contacts has held steady over the past five years, rising 

slightly (approximately 4%) from 70,574 in 2003 to 73,481 in 2004. While OIEA cannot control 

the volume of incoming investor contacts, the Office aims to improve the efficiency of its 

operations. The addition of new staff and introduction of new technologies will allow the SEC to 

increase the percentage of new matters closed within seven days from 76% in 2001 to 84% by 2006. 

Performance Measure: 8. OIEA Publications distributed by the U.S. General Services 

Administration (GSA). 

Description: OIEA has developed an extensive collection of free information to help investors 

understand the basics of investing, the risks and rewards of various products and strategies, the 

importance of diversification, how to check out brokers and advisers, and where to find information 

about companies. In addition to posting these materials on the SEC’s website, OIEA publishes a 

dozen hard-copy educational brochures. The GSA’s Federal Citizen Information Center (FCIC) 

serves as one of the most important distribution channels for the SEC’s most popular English and 

Spanish publications. 

FY 2001 FY 2002 FY 2003 FY 2004 

Plan 

FY 2004 

Actual 

FY 2005 FY 2006 

48,708 81,917 89,095 200,000 300,530 250,000 300,000 

FY 2006 Request: Working closely with GSA’s FCIC to promote the SEC’s educational materials to 

targeted audiences, the agency aims to increase the demand for these materials and the amount 

delivered to the public. 
PB - 15 

Goal Four: Maximize Use of SEC Resources 

Performance Measure: 1. Agency Turnover Rate 

Description: The implementation of several initiatives related to training, recruitment and 

retention, and work-life programs helped to considerably slow the turnover rate. This measure is 

determined by dividing the number of employees that leave the agency during the fiscal year by the 

total number of permanent and term employees on board at the beginning of each fiscal year. 

FY 2001 FY 2002 FY 2003 FY 2004 

Plan 

FY 2004 

Actual 

FY 2005 FY 2006 

9.1% 5.8% 5.9% <7% 6.3% <7% <7% 

FY 2006 Request: The agency aims to keep its turnover rate at historic lows by ensuring that staff 

compensation and benefits remain commensurate with those offered by other financial regulators, 

expanding training and work/life programs, and other efforts. 

Performance Measure: 2. Milestones achieved on major human capital initiatives. 

Description: In FY 2004, the Commission implemented eleven human capital initiatives related 

to training, recruitment and retention, and work-life programs. 

 FY 2004 

Plan 

FY 2004 

Actual 

FY 2005 FY 2006 

SEC University 

New Employee Orientation 

Expanded Management Training 

AVUE Digital Services 

New Recruitment Program 

 (Nationwide Recruitment with 

 Executive Recruiting Firms) 

Pay and Benefit Revisions (e.g. Vision & 

 Dental Coverage) 

Pay for Performance and Performance 

 Improvement Planning 

Enterprise Telework Program 

Diversity Task Force 

Enhance Special Emphasis Committees 

 (Focused on Issues Related to Specific 

 Demographic Groups at the SEC) 

Implement 1st

Phase 

Design 

Design 

Implement 

Implement 

Implement 

Design 

Design 

Design 

Implement 

Implemented 

Implemented 

Implemented 

Implemented 

Implemented 

Implemented 

Implemented 

Implemented 

Designed 

Implemented 

Expand 

Evaluate 

Evaluate 

Evaluate 

Evaluate 

Evaluate 

Evaluate 

Evaluate 

Implement

Evaluate 

Evaluate 

-- 

-- 

-- 

-- 

-- 

-- 

-- 

Evaluate 

-- 

FY 2006 Request: These initiatives will be fully implemented and evaluated in 2005. New 

performance measures will be developed to assess the results of these initiatives and assist in 

planning for changes in 2006. 
PB - 16 

Performance Measure: 3. Percentage of information technology (IT) projects that conform to 

the agency’s capital planning and investment control process (CPIC).

Description: The agency established information technology capital planning committees for 

considering and evaluating its IT investments. A corresponding CPIC process is being developed 

and refined to ensure that IT projects are effectively managed, completed on time, and within 

budget. This measure identifies the percentage of IT projects that conform to the agency’s CPIC 

process. 

FY 2001 FY 2002 FY 2003 FY 2004 

Plan 

FY 2004 

Actual 

FY 2005 FY 2006 

Data not 

available 

100% of all significant 

IT projects 

Goal Met 100% 100% 

FY 2006 Request: All IT projects will continue to conform to the agency’s required CPIC 

process. 
PB - 17 

Performance Measure: 4. Milestones achieved on major IT projects. 

Description: The agency is focusing its IT investments in five primary areas to enhance program 

effectiveness and operational efficiencies. A variety of projects are being planned or implemented in 

these areas and range in complexity and duration (e.g., some may be completed in a single fiscal year 

while others span multiple fiscal years). This measure identifies the range of initiatives and the 

project’s major milestones. 

 FY 2004 

Plan 

FY 2004 

Actual 

FY 2005 FY 2006 

EDGAR/Disclosure 

a. Electronically enhance Forms 8-K to expand 

reporting of material financial events 

b. Modify EDGAR to electronically accept 

forms using “tagged” data 

1) Forms 3, 4, and 5 (individual 

securities ownership data) 

2) Modifications to accommodate 

tagged data for financial reports 

c. Disclosure filings 

1) Identify pieces of information that 

are required to be submitted to the 

SEC within the disclosure forms in 

anticipation of using a mark-up 

language 

2) Analyze the data to determine the 

feasibility of simplifying the forms 

d. EDGAR Recompetition for Support 

Services 

Enforcement/Examination Activities 

a. Image backlog of paper discovery 

documents 

1) Phase I 

2) Phase II 

b. Conduct a pilot to better handle electronic 

media evidence 

c. Implement electronic media solution 

d. Provide fully automated processing of equity 

and options trade records in support of 

enforcement investigations 

1) Equity Trading Data 

2) Options Trading data 

e. Redesign the case management system 

Initiate 

Implement 

Complete 

Complete 

Complete 

Complete 

Initiated 

Completed 

Completed 

Completed 

Completed 

Completed 

Implement

Initiate 

Initiate 

Initiate 

Complete 

Initiate 

Initiate 

Initiate 

Implement

Implement

Complete 

Implement

Implement

Implement
PB - 18 

Internal Productivity 

a. Replace laptop and monitor infrastructure to 

improve employee productivity off-site 

b. Deploy new generation PDAs to critical staff 

c. Upgrade FOIA system 

d. Workflow & document management system 

1) Needs assessment 

2) Design 

e. Migrate to the next generation of voice 

telecommunications system 

f. Assess strategy to refresh server and storage 

infrastructure 

g. Organizational transformation 

Security/Disaster Recovery 

a. Expand SEC network capacity and 

implement point-to-point design for 

improved resiliency 

b. Migrate to alternate data center 

c. Redesign tools for access control and 

password authorization 

d. Deploy a new generation of expanded and 

enhanced intrusion detection tools 

E-Gov/Enterprise Architecture and Capital 

Planning Investment Control (CPIC) 

a. Redesign CPIC processes 

b. Enterprise architecture (EA) program 

1) Develop version 1 

2) Identify future state for EA 

3) Establish migration plan for moving 

to the desired “to-be” state 

Complete 

Complete 

Complete 

Initiate 

Initiate 

Complete 

Implement 

Initiate 

Complete 

Completed 

Completed 

Completed 

Initiated 

Initiated 

Completed 

In progress 

Initiated 

Completed 

Initiate 

Implement

Initiate 

Complete 

Complete 

Initiate 

Initiate 

Implement

Implement

Initiate 

Implement

Implement

Complete 

Implement

Implement

FY 2006 Request: The SEC expects to make progress in all five areas to enhance program 

effectiveness and operational efficiencies. However, the agency’s IT priorities for 2006 will continue 

to evolve over time. 
PB - 19 

Performance Measure: 5. Receive an unqualified audit opinion on the agency’s audited 

financial statements with no material weaknesses noted on the agency’s internal controls. 

Description: Under the Accountability of Taxpayer Dollars Act of 2002, the Commission is 

required to meet all proprietary accounting guidelines for federal agencies and to undergo annual 

audits. The SEC is implementing an aggressive plan to upgrade some of its management systems 

and processes in order to undergo its first complete financial audit in 2004. Separately, the agency 

identified two material weaknesses for internal control covering IT security and the management of 

disgorgements and penalties. 

 FY 

2001 

FY 

2002 

FY 

2003 

FY 2004 

Plan 

FY 2004 

Actual 

FY 

2005 

FY 

2006 

Material Weaknesses 2 TBD 0 0 

FY 2006 Request: The SEC aims to receive an unqualified opinion from the audit of its financial 

statements, with no material weaknesses identified. Efforts to upgrade financial systems, strengthen 

and streamline business processes, and improve information technology security will continue as a 

multi-year effort. 
PB - 20 

Performance Measure: 6. Milestones achieved on major facilities projects. 

Description: In FY 2004, the Commission implemented a number of initiatives to improve SEC 

facilities and its facilities management activities. 

 FY 2004 

Plan 

FY 2004 

Actual 

FY 2005 FY 2006 

Headquarters at Station Place 

a. Building I base building 

construction 

b. Building I interior construction 

c. Staff move into building I 

d. Building II base building 

construction 

e. Building II interior construction 

f. Staff move into building II 

New York 

a. Identify new space to house 

staff (3 World Financial Center) 

b. Conduct workflow analysis to 

ensure space is designed to 

maximize productivity 

c. Interior build-out 

d. Staff move into new permanent 

space 

Boston 

a. Identify new space to house 

staff (33 Arch Street) 

b. Conduct workflow analysis to 

ensure space is designed to 

maximize productivity 

c. Interior build-out 

d. Staff move into new space 

95% complete 

50% complete 

-- 

20% complete 

-- 

-- 

Complete 

Initiate 

-- 

-- 

Complete 

Complete 

-- 

-- 

Goal Met 

Goal Met 

-- 

Goal Met 

-- 

-- 

Goal Met 

Goal Met 

-- 

-- 

Goal Met 

Goal Met 

-- 

-- 

Complete 

Complete 

Complete 

95% complete 

Initiated 

-- 

-- 

Complete 

Initiated 

-- 

-- 

-- 

Complete 

Complete 

-- 

-- 

-- 

Complete 

Complete 

Complete 

-- 

-- 

Complete 

Complete 

-- 

-- 

-- 

-- 

FY 2006 Request: By 2006, the SEC will have completed construction and moved staff into its 

new headquarters at Station Place, as well as for the Boston and New York offices. Once these 

moves have been completed, the only outstanding lease action will be the Operations Center, 

located in Alexandria, Virginia. When that competition is completed, there should be no new 

headquarters leases or office moves until current leases expire in the next ten to fourteen years.