United States 

Securities and - -A --- . Exchange , --, . . , .. - . ,, , 

.-,, -- , A - ,,, . -- , , , . . Commission . - 

. :: . . . -: . - A A -- A .... -...... . , ,,,. 
Securities and Exchange Commission 

($ in thousands) 

FY 2007 Estimate: 

Appropriated Offsetting Collections, Current Year .............. $863,117 

Unobligated Balances, Prior Years .......................... 14,000 

Total FY 2007 Spending Authority. ................... $877,117 

FY 2008 Request: 

Appropriated Offsetting Collections, Current Year .............. $875,000 -- ~ 

Unobligated Balances, Prior Years .......................... 30,330 

Total FY 2008 Request. ............................. $905,330 

Appropriations Language 

For necessary expenses for the Securities and Exchange Commission, including services as 

authorized by 5 U.S.C. 3 109, the rental of space (to include multiple year leases) in the District 

of Columbia and elsewhere, and not to exceed $3,000 for official reception and representation 

expenses, $905,330,000, to remain available until expended; of which not to exceed $13,000 

may be used toward funding a permanent secretariat for the International Organization of 

Securities Commissions; and of which not to exceed $100,000 shall be available for expenses 

for consultations and meetings hosted by the Commission with foreign governmental and other 

regulatory officials, members of their delegations, appropriate representatives and staff to 

exchange views concerning developments relating to securities matters, development and 

implementation of cooperation agreements concerning securities matters and provision of 

technical assistance for the development of foreign securities markets, such expenses to include 

necessary logistic and administrative expenses and the expenses of Commission staff and 

foreign invitees in attendance at such consultations and meetings including: (1) such incidental 

expenses as meals taken in the course of such attendance; (2) any travel and transportation to or 

from such meetings; and (3) any other related lodging or subsistence: Provided, That fees and 

charges authorized by sections 6(b) of the Securities Exchange Act of 1933 (15 U.S.C. 77f(b)), 

and 13(e), 14(g) and 31 of the Securities Exchange Act of 1934 (15 U.S.C. 78m(e), 78n(g), and 

78ee), shall be credited to this account as offsetting collections: Provided further, That not to 

exceed $875,000,000 of such offsetting collections shall be available until expended for 

necessary expenses of this account: Provided further, That $30,330,000 shall be derived from 

prior year unobligated balances from funds previously appropriated to the Securities and 

Exchange Commission: Provided further, That the total amount appropriated under this 

heading from the general fund for fiscal year 2008 shall be reduced as such offsetting fees are 

received so as to result in a final total fiscal year 2008 appropriation from the general hnd 

estimated at not more than $0. 
Position and Cost Data for Fiscal Years 2006 - 2008 

Enforcement 

Headquarters 

Regions and Districts 

Total 

Compliance Inspeclions and Eramlnations 

ICnA Program 

Headquarters 

Regions and Districts 

Subtotal 

BDISRO Rogram 

Headquarters 

Regions and Districts 

Subtotal 

Total 

Corponlion Finance 

Market Reguhlion 

Inveshnent Management 

Gcnenl Counsel 

Headquarters 

Regions and Districts 

Total 

Other Pmgnm OlAns 

Chief Accountant 

Investor Education and Assistance 

International Affairs 

Economic Analysis 

Risk Assessment 

Administrative Law Judges 

Total 

Agency Direction and Administntive Support 

Executive Staff 

Public Affairs 

SerraarY 

Executive Director 

Financial Management 

Human Resources 

Administrative Services 

Filing and Information Services 

Information Technology 

Equal Enployrent Opportunity 

Inspector General 

Total 

Total FTE and Positions 

Headquarters Total Permanent 

Regional Office Total Permanent 

Temporary 

Staff Salaries 

Personnel Benefits 

Other Personnel Cornpensation 

Subtotal Cost of Salaries 

Other Expmses 

Benefits for Former Personnel 

Travel and Transportation of Pcrsons 

Transportation of Things 

Communication and Rental 

Printing and Reproduction 

Other Services 

Supplies and Matnials 

Equipment 

Building Alterations 

Claims and Indemnities 

Sub-total Cost of Other Expenses 

Spmding Authority 

FY 2006 

FFEs Positions 

429 446 

728 747 

1,157 1,193 

37 35 

438 448 

475 483 

109 106 

296 303 

405 409 

880 892 

47 1 476 

166 174 

154 156 

118 124 

14 14 

132 138 

54 53 

37 38 

25 27 

26 27 

5 4 

12 I I 

159 I60 

37 40 

6 6 

24 27 

6 6 

47 51 

65 63 

84 89 

98 99 

I I8 126 

9 10 

10 10 

504 527 

3,695 3,788 

2.147 2.204 

1.476 1,512 

72 72 

Actual 

Cost 

$442,125,708 

123,246,157 

7,705.575 

$573,077,440 

255,459 

8,544,320 

174.697 

96,133,686 

10,043,550 

132.042.597 

2,774,128 

22,388,395 

31,167,631 

675,831 

$304,200,295 

9877,277,734 

FY 2007 

FTEs Positions 

419 446 

703 747 

1,122 1.193 

33 35 

422 448 

455 483 

100 106 

285 303 

385 409 

840 892 

447 476 

164 174 

147 156 

117 124 

13 14 

130 138 

50 53 

36 38 

25 27 

25 27 

4 4 

I I I I 

151 160 

37 40 

6 6 

25 27 

6 6 

48 5 I 

59 63 

84 89 

93 99 

118 126 

9 10 

9 10 

494 527 

3,567 3,788 

2.072 2,204 

1.423 1,512 

72 72 

Estimate 

Cost 

5457.870.300 

116,635,200 

10,153,700 

$584,659,200 

280,000 

10,761,700 

161.200 

11 1,275,200 

10,485,700 

121,001,700 

3,238,100 

30,665,600 

4,338,600 

250,000 

$292,457,800 

$877,117,000 

FY 2008 

FTEs Positions 

419 446 

703 747 

1,122 1,193 

33 35 

422 448 

455 483 

100 106 

285 303 

385 409 

840 892 

447 476 

164 174 

147 156 

117 124 

13 14 

130 138 

50 53 

36 38 

25 27 

25 27 

4 4 

I I I I 

151 160 

37 40 

6 6 

36 39 

6 6 

48 51 

59 63 

84 89 

70 74 

130 139 

9 10 

9 10 

494 527 

3,567 3,788 

2,072 2,204 

1,423 1,512 

72 72 

Rquest 

Cost 

5485,451,800 

123,556,800 

8,919,300 

$617,927,900 

80,000 

10,761,700 

161,200 

106,669,500 

10,485,700 

121,001,700 

3,238,100 

30,665,600 

4,338,600 

0 

$287,402,100 

S905.330.000 
Summary of Changes 

($ in thousands) 

FY 2007 FY 2008 Net 

Estimate Request Channe 

Spending Authority.. ................... $877,117.0 $905,330.0 +$28,213.0 

Full-time Equivalents.. ................ 3,567 3,567 --- 

Positions.. 3,788 3,788 --- ................................ 

Explanation of Changes: Positions - FTE Amount 

One-Time FY 2008 Adjustments 

Space rent and utilities --- - - - -4,605.7 

Other non-compensation object 

classes --- --- -547.8 

Subtotal.. ............................. - - - -$5.153.5 --- 

FY 2008 Base Changes 

Annualization of FY 2007 pay raise - - - - - - +3,435.2 

FY 2008 pay raise - - - --- +12,927.7 

Promotions and merit pay increases - - - --- +17,003.6 

Subtotal. - - - - +$33.3_66.5 - - - .............................. - 

--- - - - Total Change ........................... - - +%28.213.0 
Narrative Explanation of Changes 

One-Time FY 2008 Adjustments 

1. Space rent and utilities. This decrease of $4.6 million represents the final adjustment 

associated with the agency's move into its new headquarters location. 

2. Other non-compensation obiect classes. This reflects one-time reductions totaling $547.8 

thousand for reduced costs such as benefits for former personnel and worker's 

compensation. 

Base Changes for FY 2008 

1. Annualization of FY 2007 pay raise. The requested $3.4 million provides for the 

annualization of the FY 2007 2.2 percent pay raise that became effective in January 2007. 

2. FY 2008 pay raise. The requested $12.9 million provides funding for a 3.0 percent pay 

raise, effective January 2008. 

3. Promotions and merit pav increases. The requested $17 million provides funding for career 

ladder promotions and merit pay increases of eligible staff. This amount includes the costs 

of maintaining the SEC's pay-for-performance pay system. 
SEC Strategic Goals 

Goal 1: Enforce Compliance With Federal Securities Laws 

The Commission seeks to detect problems in the securities markets, prevent and deter 

violations of federal securities laws, and alert investors to possible wrongdoing. When 

violations occur, the SEC aims to take prompt action to halt the misconduct, sanction 

wrongdoers effectively, and, where possible, return funds to harmed investors. 

Goal 2: Promote Healthy Capital Markets 

Through an Effective and Flexible Reaulatorv Environment 

The savings and investments of every American are dependent upon the maintenance oi 

healthy capital markets. The Commission seeks to sustain an effective and flexible regulatory 

environment that will facilitate innovation, competition, and capital formation to ensure that our 

economy can continue to grow and to create jobs for our nation's future. Enhancing the 

productivity of America is a key goal that the SEC works to achieve by increasing investor 

confidence in the capital markets. 

Goal 3: Foster Informed Investment Decision Making 

An educated investing public ultimately provides the best defense against fraud and 

costly mistakes. The Commission works to promote informed investment decisions through two 

main approaches: reviewing disclosures of companies and mutual hds to ensure that clear, 

complete, and accurate information is available to investors; and implementing a variety of 

investor education initiatives. 

Goal 4: Maximize the Use of SEC Resources 

The investing public and the securities markets are best served by an efficient, wellmanaged, and proactive SEC. The Commission strives to improve its organizational 

effectiveness by making sound investments in human capital and new technologies, and by 

enhancing internal controls. 

FY 2008 by Strategic Goal 

(S in Millions) 

Goal4 S72M 

N 2008 by Strategic Goal 

(Permenant FTE) 

Goal4 382 

Goal3 S126M Goal3 524 

14% 

Goal 2 $59 M Goal 2 263 6% Goal 1 S 648 M 7% Goal 1 2326 

72% 67% 
FY 2008 Request by Strategic Goal and Program 

SEC Program Office 

FY 2008 Actual 

FY 2007 Estlmate 

Enforcement 

Headquarters 

Regions 

Compliance inspections and 

Examinations 

CIIA Programs 

Headquarters 

Regions 

BDlSRO Program 

Headquarters 

Regions 

Corporation Finance 

Market Regulation 

Investment Management 

General Counsel 

Headquarters 

Regions 

Other Program Officas 

Agency Direction And Administrative 

Support 

Total SEC Funding 

% Increase wer Current Fiscal Year 

FY 2006 

Actual 

f877~n.7 

$311.425.7 

200.597.8 

110.827.9 

203.514.9 

109,745.2 

8.464.7 

101.280.5 

93.769.7 

25.283.1 

68,486.6 

118,060.4 

41.462.8 

42.472.6 

32.503.8 

29.253.4 

3.250.4 

46.917.7 

80.919.8 

$877,277.7 

FY 2008 Request 

Goal I Goal 2 Goal 3 Goal 4 

Enfons Healthy Informed Maximize 

Security Capital Decision Use of FY 2008 

Laws Markets Making Rewurces Request 

$601,243.6 $75,777.7 $127,833.8 $72,422.6 

$605,653.4 $69,984.7 $127,332.5 $74,148.4 

$321 $239.7 $0.0 $0.0 $0.0 $321.239.7 

21 1.214.1 211.214.1 

110.025.6 110.025.6 

213.310.3 213.310.3 

115.027.4 115.027.4 

8.872.2 8.872.2 

106,155.2 106.155.2 

98.282.9 98.282.9 

26.499.9 26.499.9 

71.783.0 71.783.0 

31.490.4 11.336.5 83,134.5 125.961.4 

12.829.6 15.041.6 16.368.8 44.240.0 

26.141.1 8.112.7 2,704.3 8.112.8 45.070.9 

20.838.6 6.467.1 2.155.7 6.467.1 35.928.5 

18.754.7 5.820.4 1.940.1 5.820.4 32.335.6 

2.083.9 646.7 215.6 646.7 3.592.9 

12.347.8 17,688.4 12,335.3 259.2 42.628.7 

10.285.9 776.6 9.275.2 56,612.8 76,950.5 

$648,483.4 $59,420.9 $125,973.8 $71,451.9 ~~5,330.0 

7% -1 5% -1 % -4% 

FY 2007 

Estlmate 

$877,117.0 

$310.138.3 

200,035.0 

110.103.3 

204,912.9 

110.499.1 

8.522.9 

101.976.2 

94.413.8 

25,456.7 

68.957.1 

121.892.7 

42.71 5.5 

43.614.6 

34.607.2 

31.146.5 

3.460.7 

41.169.6 

78,066.2 

$877.1 17.0 

Changes over 

FY 2006 Actual 

s % 

$ 28,052.3 3 

9.814.0 3 

10.616.3 5 

-802.3 -1 

9,795.4 5 

5.282.2 5 

407.4 5 

4.874.7 5 

4.513.2 5 

1.216.8 5 

3.296.3 5 

7.901 .O 7 

2.777.2 7 

2.598.3 6 

3.424.7 11 

3.082.2 11 

342.5 11 

4.289.0 -9 

-3.969.3 -5 

$28,052.3 3 

Change over FY 2007 

Current Plan 

s % 

S 28.213.0 3 

11.101.4 4 

11.179.2 6 

-77.8 0 

8.397.4 4 

4.528.3 4 

349.3 4 

4.179.0 4 

3,869.1 4 

1.043.2 4 

2.825.9 4 

4.068.7 3 

1.524.5 4 

1.456.3 3 

1.321.3 4 

1.189.1 4 

132.2 4 

1.459.1 4 

-1,115.7 -1 

$28,213.0 3 
FY 2008 Request by Strategic Goal 

The SEC's major initiatives for FY 2008 are highlighted below and are described in 

further detail within the chapters that follow. The agency intends to implement these initiatives 

by reallocating existing resources as necessary. 

This chapter organizes the initiatives for FY 2008 by the SEC's four goals, as established 

under the agency's 2004-2009 strategic plan. These goals may change as the Commission 

adopts a new five-year strategic plan over the next several months. 

Goal 1: Enforce Compliance with Federal Securities Laws 

In FY 2008, the SEC will continue to develop innovative approaches to enforcing 

compliance with the federal securities laws, through the use of new technologies and enhanced 

emphasis on those entities and activities that pose the greatest threat to investors. These efforts 

are described below for the SEC's enforcement and examination programs. 

Enforcement Program: The Division of Enforcement will continue to pursue violators 

vigorously, through methods such as trading suspensions; asset freezes; temporary restraining 

orders; coordination with criminal authorities; and focused, expedited investigations. 

Enforcement staff will work to develop increasingly sophisticated approaches for 

detecting violations of law by organizing and gathering data from a wide range of sources. The 

staff expects to receive and handle a combined total of 2.0 million investor complaints, tips, and 

forwarded e-mail spams and to open about 1,265 new matters under inquiry (MUIs). 

The Division plans to open and pursue investigations in all core areas of enforcement, 

including market manipulation, insider trading, offering fraud and violations by registered 

firms. Conflicts of interest in the financial services sector, as well as serious financial 

accounting frauds, likely will remain the most important program areas. The Division will 

continue to focus on important investigations in areas such as promoting transparent financial 

statements and protecting seniors from investment scams. 

The staff also will continue to investigate fraud in new areas such as the non-Nasdaq 

over-the-counter market, which has grown significantly in dollar volume and presents increased 

opportunities for fraud and abuse. The Commission also expects to detail staff to the 

Department of Justice to support criminal prosecution of securities fraud. The staff plans to 

open roughly 925 investigations. 

The SEC will continue to work with foreign authorities to improve cross-border 

enforcement cooperation, develop information-sharing agreements, and collaborate with foreign 

authorities to secure assets that may have been transferred outside of the US. 

The Commission will continue to commit resources to protracted litigation, an essential 

element in maintaining a credible law enforcement program. Litigated financial fraud cases, in 
particular, require extensive resources as they proceed through lengthy discovery, motion 

filings, and trial. In addition, litigation staff will continue to seek emergency relief to freeze 

assets, halt ongoing market manipulations, and alert investors to false or misleading disclosures 

made by issuers. The Division plans to open about 360 administrative proceedings and to 

institute approximately 220 civil proceedings. 

Examination Promam: The Office of Compliance Inspections and Examinations (OCIE) 

will continue to implement the SEC's risk-based examination program, which is designed to 

detect violations of the federal securities laws and foster strong compliance practices. Through 

routine, cause, and special purpose examinations, SEC's resources will be focused on those 

firms and practices that have greatest potential for violative conduct that can harm investors. 

Higher-risk activities include those that create significant conflicts of interest where compliance 

policies and procedures are insufficient to mitigate those conflicts. Staff also will continue to 

provide feedback to registered firms that will result in the correction of compliance problems. 

Results from examinations will continue to be used to identify trends and emerging issues that 

may need to be addressed through enforcement actions, Commission guidance or rulemaking, 

investor alerts, or other actions. 

Higher-risk advisers, as well as their affiliated registered fund groups and private funds, 

will be examined at least every three years. In each of these inspections, the staff will evaluate 

a firm's compliance program, apply forensic tests designed to uncover schemes to defraud 

investors, and assign the firm a risk rating. The staff anticipates that approximately 10 percent 

of all advisers will have higher risk profiles. In addition, OCIE will select a statistically random 

sample of advisers that have lower risk profiles, and the staff will conduct comprehensive, riskbased inspections of as many of these firms and their affiliated fund groups as resources will 

allow. OCIE will review the deployment of monitoring teams to large advisory firms and 

consider expanding the program to include additional participating firms that appear to have a 

strong compliance culture. 

Examiners will review the risk management, compliance, and internal controls of the 

largest broker-dealers and will continue to examine consolidated supervised entities. In 

addition, examinations will continue to concentrate on compliance with sales practice standards 

for retail investors, with particular focus on sales and supervisory practices with respect to 

suitability, unauthorized trading, and failure to disclose risks. Exams also will assess brokerdealer compliance with anti-money laundering rules, net capital protections, trading rules, backoffice operations, and information security. Staff will implement improvements to the oversight 

exam and inspection programs intended to better assess the quality of the self-regulatory 

organizations' (SROs) examination programs and recommend necessary improvements. The 

staff will conduct risk-based and cycle inspections of SRO surveillance, disciplinary, 

examination, arbitration, and listing programs. 
Goal 2: Promote Healthv Capital Markets 

Through an Effective and Flexible Renulatorv - Environment 

The SEC will continue to consider regulatory proposals that will have widespread effects 

on the securities markets, in areas such as investment management regulation, securities firm 

supervision, disclosure, and accounting policy. Some of the major highlights are described 

below. 

Investment Management Renulation: One of the top strategic priorities for the Division 

of Investment Management in FY 2008 will be to implement new rules designed to provide 

mutual fund investors with more reader-friendly disclosures and to improve the delivery of 

mutual fund information through increased use of electronic means, including the Internet. The 

Division also anticipates recommending that the Commission adopt new rules designed to 

eliminate the need to submit applications for exemptive relief that are substantially similar to 

certain previously granted applications. 

Securities Firm and Market Supervision: The Division of Market Regulation will likely 

face significant new challenges regarding the regulation and supervision of the major securities 

markets, including analyzing the implications of cross-border unions of US and non-US selfregulatory organizations. In addition, the staff will review the proposed merger of the National 

Association of Securities Dealers (NASD) and New York Stock Exchange (NYSE) member 

regulation functions and aim to reduce duplicative regulation in multiple SROs. The SEC also 

will continue to implement initiatives to modernize the national market system and to address 

self-regulatory organization governance and transparency. 

The Division will continue rulemaking efforts related to Regulation SHO, Regulation M, 

and Rule 15c2- 1 1. The staff will consider whether confirmations are the best vehicle for 

providing information to investors and whether other sources of information would be more 

cost-effective. In addition, the SEC will continue to review self-regulatory organization (SRO) 

rule proposals in areas such as sales practices and the supervision of personnel and to address 

issues relating to foreign and domestic transfer agents. The staff also will provide consolidated 

supervision to at least five internationally active securities firms and review additional 

applications for such supervision. 

In collaboration with governments around the world, the SEC will supervise globallyactive US firms, promote high regulatory standards worldwide, and provide technical assistance 

to emerging markets. 

Disclosure: The Division of Corporation Finance intends to recommend adoption of rules 

to improve the efficiency and effectiveness of the registration and reporting processes for small 

businesses and implement universal Internet availability of proxy materials. The staff also will 

review the results of the pilot program on extensible Business Reporting Language (XBRL) to 

determine whether rule proposals are appropriate and continue to study the effectiveness, 

consistency, and transparency of International Financial Reporting Standards (IFRS). 
Accounting Policv: The Office of the Chief Accountant (OCA) will continue overseeing 

the development of accounting standards, particularly initiatives by the Financial Accounting 

Standards Board (FASB) to simplify and codify accounting standards and accounting for 

financial instruments. The Office also will continue to monitor the FASB's efforts to move 

toward a more principles-based approach to setting accounting standards, as well as any new 

standards that result from the SEC staff study on off-balance sheet arrangements. 

The SEC also will continue to advance global transparency and disclosure, the agency 

intends to continue work in furtherance of the 'roadmap' published by SEC staff in FY 2005, 

which highlights the steps needed to eliminate the need for the requirement that foreign private 

issuers reconcile financial statements prepared under IFRS to US Generally Accepted 

Accounting Principles (GAAP). The SEC staff will analyze the implications of foreign private 

issuers' IFRS financial statements and reconciliations, which many foreign private issuers will 

begin to file with the SEC in mid-2006. The SEC staff also will begin working to identify any 

changes to its rules that would be necessary to allow the elimination of the IFRS reconciliation 

requirements. 

The staff will continue to oversee the activities of the Public Company Accounting 

Oversight Board (PCAOB), including inspecting audit firms and promulgating and interpreting 

auditing standards and auditor independence requirements. The PCAOB is scheduled to 

conduct quality reviews of approximately 225 audit firms during the year. 

Goal 3: Foster Informed Investment Decision Making 

The Commission works to achieve this goal through two main efforts: reviewing the 

disclosures of securities market participants to make them more complete, accurate, and timely, 

and educating and assisting investors who have questions or concerns related to the securities 

markets. In FY 2008, the SEC expects to perform the activities listed below. 

Disclosure Reviews: The Divisions of Corporation Finance and Investment Management 

expect to review the disclosures of about 33 percent of all reporting companies and investment 

company portfolios. This volume of disclosure reviews is expected to help deter fraud in public 

securities transactions, help ensure that investors receive material information about emerging 

and novel issues, and satisfy the review requirement of the Sarbanes-Oxley Act. 

In addition to reviewing the filings of reporting companies, staff in the Division of 

Corporation Finance expect to review the filings of 8 10 new issuers, including 630 IPO 1933 

Act registration statements, 160 new issuer 1934 Act registration statements, and 20 Regulation 

A exempt offering statements. The Division of Investment Management will continue to review 

the disclosures of most new mutual funds and closed-end funds, all new insurance contracts, 

and most portfolios of new unit investment trusts (UITs). The staff also will examine almost all 

post-effective amendments that reflect material changes in disclosure or fund operations, and 

almost all proxy statements. 
Investor Education: In FY 2008, the Office of Investor Education and Assistance (OIEA) 

will continue to focus on educating seniors about investments commonly marketed to them and 

providing tips for detecting and avoiding potential frauds and scams. The Office also will 

continue seeking ways to enhance the investor education program's ability to reach the nation's 

investors. The Office expects to receive about 77,000 new investor complaints, questions, and 

other contacts, resulting in about 70,000 unique new matters. The staff likewise will close 

about 69,000 open matters and will increase the percentage of matters closed within seven days 

to 83 percent. 

OIEA also carries out the SEC's investor education program, which includes producing 

and distributing educational materials, collaborating with state and federal agencies, fostering 

public-private partnerships, and participating in educational events. OIEA also provides policy 

guidance to the SEC's program offices and consults with other SEC staff on proposed 

rulemakings and their possible effects on individual investors. The staff anticipates that the 

SEC's investor education web pages will receive about 15 million hits. 

Goal 4: Maximize the Use of SEC Resources 

In FY 2008, the SEC will continue implementing a five-year strategic plan ensuring that 

taxpayer dollars are used to maximum effect to fulfill the agency's mission. Below are listed 

some examples of the efforts to be undertaken in FY 2008 to enhance the SEC's operational 

effectiveness. 

Audited Financial Statements: The Office of Financial Management (OFM) will 

coordinate the agency's preparation of quarterly and annual audited financial statements, along 

with other external and internal financial reports. OFM also will continue implementing 

changes to management systems to ensure compliance with all applicable federal accounting 

standards and complete the compilation of accounting and financial management policies and 

procedures. The Office also will continue work on implementing the financial systems roadmap 

for upgrading or replacing the SEC's current financial system. 

Strengthened Controls over Budget Planning: Staff will continue to work with 

management and program staff to adapt the Budget and Program Performance Analysis System 

(BPPAS) to meet emerging needs, implement changes to facilitate the integration of budget and 

performance information within the agency's budget submissions, and continue efforts to 

streamline and consolidate its budget and planning activities. 

Staff Recruitment, Retention, and Training: The SEC seeks to maintain and improve 

upon its position as one of the top five places to work in the federal government. The Office of 

Human Resources (OHR) will support the SEC's efforts through continued implementation of 

pay-for-performance and strong benefits programs, including workllife initiatives such as 

building a new child care facility at the SEC's headquarters and expanding telework 

opportunities. OHR also will continue to further develop and fully integrate its systems for 

performance management, employee development, selection, and succession planning. 
Information Technolo~v: The Office of Information Technology (OIT) supports the 

agency's use of technology to enhance agency-wide mission performance. In FY 2008, the 

disclosure modernization program will continue to leverage interactive data formats such as 

extensible Business Reporting Language (XBRL), focusing initially on consolidating and 

simplifying cover page submissions and then consolidating a subset of periodic reporting forms 

filed under the Securities Exchange Act of 1934. 

The SEC's Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system's 

database and documents processing components will be upgraded to take greater advantage of 

the interactive data contained within these forms, allowing internal and external users to search 

and analyze the content of filings much more easily. 

In FY 2008, OIT will implement the second phase of an upgrade to the Division of 

Enforcement's case tracking system, including improved handling of attorney work papers 

throughout the case lifecycle. Modules for handling litigation and debt collection activities will 

be implemented as well. A similar tool for work paper management and overall examination 

management information will be fully implemented in OCIE. The examination system will 

support the Office's efforts in implementing a consistent methodology across the program and 

in ensuring compliance issues are identified without undue burden to registered firms. A project 

to better integrate the examination and enforcement systems to enable more efficient and 

effective tracking of referrals between the programs also will be initiated. 

OIT will implement a project to create a uniform system for tracking Commission 

actions and managing the paper flow between the Commissioners and the divisions and offices. 

In FY 2008, the focus will be on rulemaking correspondence between internal organizations and 

the management of administrative proceedings and Commission actions. 

Finally, the SEC's information technology security program will focus on internal 

software development processes and ensuring that information security needs are maintained 

throughout the software development lifecycle. In addition, the SEC will begin implementing a 

new backup site for its centralized information stores and systems to provide additional 

resiliency for the agency's critical functions. 
Description of Selected Fees 

($ in millions) 

Source of Fees FY 2006 FY 2007 FY 2008 

Actual Estimate Estimate 

Registration of securities under the Securities 

Act of 1933 (Section 6(b)) $499 $260 $234 

Securities transactions under the Securities 

Exchange Act of 1934 (Section 3 1) 1,351 1,100 892 

Merger and Tender Fees under the Securities 

Exchange Act of 1934 (Sections 13(e) and 14(~))" - 54 - 20 - 22 

ActualITarget Offsetting Collections Amounts $1.904$1.380 $1.148 

1 -/ Estimates for Sections 13(e) and 14(g) fees for FYs 2006 and 2007 provided by the Office of Management and Budget. 

Explanation of Fee Collections 

The SEC is directed to collect fees under Section 6(b) of the Securities Act of 1933 and 

Sections 13(e), 14(g) and 3 1 of the Securities Exchange Act of 1934. Within the Federal 

Budget, these fees are classified as offsetting collections. 

Sections 6(b) and 3 1 require the Commission to periodically adjust the fee rates under 

these sections so that total fee collections during a fiscal year are reasonably likely to equal a 

target collection amount. The Commission must make annual adjustments to the fee rates 

applicable under these sections for each fiscal year through 201 1, and one final adjustment to 

fix the fee rates for fiscal year 2012 and beyond. In addition, Section 3 1 requires the 

Commission to determine for each fiscal year through 20 1 1 if a mid-year adjustment to the 

Section 3 1 fee rate is required and, if so, to adjust the rate. The Commission must calculate the 

adjustments to the fee rates based on methodologies developed in conjunction with the 

Congressional Budget Office and the Office of Management and Budget (OMB). 

Sections 13(e) and 14(g) do not contain target collection amounts. The rates for these 

fees are changed on an annual basis to keep them at the same rate as that applicable under 

Section 6(b). This harmonization of rates is designed to remove any ambiguity with respect to 

the fees applicable when a registration of new securities is made in connection with the 

repurchase of stock or as part of a merger. 

In the event that the Commission does not have a regular appropriation at the start of its 

fiscal year, each fee rate is required to remain at its prior year's rate until a specified period of 

time after a regular appropriation is enacted. The Commission is required to publish the annual 

fee rates for FY 2008 in the Federal Register no later than April 30, 2007. 
In FY 2006, the SEC collected $499 million in Section 6(b) registration fees; 

approximately 28 percent below the target collection amount of $689 million. From October 1 

through November 27,2005, the Section 6(b) fee rate was $1 17.70 per million dollars, due to 

the Commission operating under a continuing resolution. From November 28,2005 through 

September 30,2006, the end of the Commission's fiscal year, the fee rate was $107.00 per 

million dollars. 

The Commission also collected $1.40 billion in Section 3 1 transaction fees, slightly less 

than the target collection amount of $1.44 billion. From October 1 through December 2 1, 2005, 

the Section 3 1 fee rate was $41.80 per million dollars, because the Commission was operating 

under a continuing resolution. From December 22,2005 through September 30,2006 the fee 

rate was $30.70 per million dollars. In FY 2006, the SEC determined that a mid-year 

adjustment was not required. 

The SEC collected approximately $53.5 million in Section 13(e) and 14(g) fees in FY 

2006, about 124 percent more than the merger and tender fees collected in FY 2005. As noted 

above, Sections 13(e) and 14(g) do not contain target collection amounts. 

FY 2007 

The target collection amount for Section 6(b) registration fees in FY 2007 is $2 14 

million, an approximately 69 percent decrease from the target collection amount for fiscal 2006. 

The target collection amount for Section 3 1 transaction fees is $88 1 million, about a 39 percent 

decline from the FY 2006 level. 

The Commission is currently under a continuing resolution that, as amended, will fund 

agency operations from October 1,2006 through February 15,2007. During this period, the fee 

rate under Section 6(b) of the Securities Act of 1933 will remain at the prior year's rate of 

$107.00 per million dollars. In addition, the fee rate under Section 3 1 of the Securities 

Exchange Act of 1934 will remain at the prior year's rate of $30.70 per million dollars. 

The Commission expects that a continuing resolution for the remainder of FY 2007 will 

be enacted and believes that such a continuing resolution would be deemed a regular 

appropriation for purposes of the fee provisions. If so, the fee rate under Section 6(b) would 

decrease from $107.00 per million dollars to $30.70 per million dollars five days after 

enactment of such a continuing resolution. Likewise, the Section 3 1 fee rate would decrease 

from $30.70 per million dollars to $15.30 per million dollars 30 days after enactment of such a 

continuing resolution. 

Further, pursuant to Section 3 1, the Commission would determine no later than March 1, 

2007 whether a mid-year adjustment to the Section 3 1 fee rate would be necessary. This 

determination, which would be published in the Federal Register, would be based on whether a 

revised estimate of transaction dollar volume in FY 2007 falls within ten percent of the agency's 

original projection for FY 2007. If a mid-year adjustment to the Section 3 1 fee rate were 

required, it would become effective on April 1,2007 and remain effective through the 

14 
remainder of the fiscal year. However, based on transaction dollar volume to date, it does not 

appear that a mid-year adjustment to the Section 3 1 fee rate would be necessary in FY 2007. 

Assuming that no mid-year adjustment would be necessary, the Commission estimates that $1.1 

billion in Section 3 1 transaction fees and $260 million in Section 6(b) registration fees would be 

collected in FY 2007. 

OMB provides the SEC with its estimate of fee collections under Sections 13(e) and 

14(g) and has projected that fee collections under these sections in FY 2007 will total 

approximately $20 million. 

The target collection amount for Section 6(b) registration fees in FY 2008 is $234 

million, while the target collection amount for Section 3 1 transaction fees is $892 million. In 

addition, OMB estimates that fee collections under Sections 13(e) and 14(g) in FY 2008 will 

total about $22 million. Taken together, these fees will generate approximately $1,148 billion. 

The Commission will publish the fee rates for FY 2008 in the Federal Register no later than 

April 30,2007. 
Division of Enforcement 

Executive Summary 

FY 2006 FY 2007 FY 2008 

Actual Estimate Request 

FTE: Headquarters 429 419 4 19 

Regions and Districts 728 - 703 - 703 

Total 1,157 1,122 1,122 

Cost: Salaries and Benefits ($000) $200,597.8 $200,035.0 $2 1 1,2 14.1 

Non-Personnel Expenses ($000) 1 10,827.9 110,103.3 110,025.6 

Total Costs ($000) $311,425.7 $310,138.3 $321,239.7 

The SEC's Division of Enforcement prosecutes violations of the federal securities laws 

and works closely with the Department of Justice and U.S. Attorneys offices to coordinate and 

assist in criminal prosecutions. 

FY 2008 FTE by SEC Strategic Goal 

Intelligence Analysis: The staff expects to handle two million investor complaints, tips, 

and forwarded e-mail spams and to open about 1,265 matters under inquiry (MUIs). 

Goal 1 

Enforce 

Compliance 

with Federal 

Securities Laws 

1,122 

Investigations: The Division will continue to maintain a presence in all core areas of 

enforcement, including market manipulation, insider trading, and offering fraud. Conflicts of 

interest in the financial services sector, as well as serious financial accounting frauds, likely will 

remain the most important program areas. The Division will continue to focus on important 

investigations, in areas such as promoting transparent financial statements and protecting 

seniors from investment scams. The Division plans to open 925 investigations. 

Proceedings: The SEC will continue to commit resources to protracted litigation, an 

essential element in maintaining a credible law enforcement program, and to seek emergency 

relief to freeze assets, halt market manipulations, and alert investors to false or misleading 

disclosures. The increasing complexity of the SEC's enforcement actions, the initiation of 

emergency and subpoena enforcement actions, and the SEC's efforts to obtain significant 

sanctions against defendants where appropriate all will consume Division resources. 

Goal 2 

Promote Healthy 

Capital Markets 

Goal 3 

Foster Informed 

Investment 

Decisionmaking 

Goal 4 

Maximize the 

use of SEC 

Resources 
Office of Compliance Inspections and Examinations 

Executive Summary 

FY 2006 FY 2007 FY 2008 

Actual Estimate Re~uest 

FTE: ICIIA Program 

Headquarters 37 33 33 

Regions and Districts 438 - 422 422 

Subtotal 475 455 455 

BDISRO Program 

Headquarters 109 100 100 

Regions and Districts - 296 285 - 285 

Subtotal 405 3 85 385 

Total 880 840 840 

Cost: Salaries and Benefits ($000) $134,685.1 $138,200.2 $147,330.9 

Non-Personnel Expenses ($000) 68,829.8 66,712.7 65,979.4 

Total Costs ($000) $203,514.9 $204,912.9 $213,310.3 

The Office of Compliance Inspections and Examinations (OCIE) conducts the SEC's 

examination program to detect violations of federal securities laws and evaluate internal 

compliance controls at securities firms registered with the SEC. About 10,600 investment 

advisers, 940 fund complexes, 6,000 broker-dealers with 172,000 branches, 12 self-regulatory 

organizations (SROs), and over 600 transfer agents are subject to SEC routine, cause, and 

special purpose examinations. In addition, seven entities that provide clearing agency functions, 

as well as the Public Company Accounting Oversight Board (PCAOB), are subject to 

examination by the staff. These inspections are conducted by staff in the agency's regional, 

district, and headquarters offices. OCIE's risk-based program is designed to focus the SEC's 

resources on those firms and practices that have the greatest potential for securities law 

violations that can harm investors. In recent years, OCIE has expanded its capability to identify 

high-risk issues warranting examination. 

FY 2008 FTE by SEC Strategic Goal 

Goal 1 

Enforce 

Compliance 

with Federal 

Securities Laws 

840 

Goal 2 

Promote Healthy 

Capital Markets 

Goal 3 

Foster Informed 

Investment 

Decisionmaking 

Goal 4 

Maximize the 

use of SEC 

Resources 
Division of Corporation Finance 

Executive Summary 

FY 2006 FY 2007 FY 2008 

Actual Estimate Request 

FTE: Headquarters 471 447 447 

Cost: Salaries and Benefits ($000) $80,815.9 $85,572.1 $89,994.9 

Non-Personnel Expenses ($000) 37,244.5 36,320.6 35,966.5 

Total Costs ($000) $118,060.4 $121,892.7 $125,961.4 

The Division of Corporation Finance establishes disclosure requirements and monitors 

disclosure to provide investors with information necessary to make investment decisions and to 

help prevent fraud and misrepresentation in securities transactions. Continuing investor interest 

regarding the quality of financial reporting and corporate governance and significant changes in 

disclosure and other requirements applicable to reporting companies have contributed to a 

changing regulatory environment affecting the securities markets. 

FY 2008 FTE by SEC Strategic Goal 

Review of Filings: The Division expects to complete about 4,485 reviews of reporting 

issuers. This 33 percent reporting company review level is expected to help deter fraud in 

public securities transactions, help ensure that investors receive material information about 

emerging and novel issues, and will satisfy the review requirement of the Sarbanes-Oxley Act 

of 2002. 

Goal 1 

Enforce 

Compliance 

with Federal 

Securities Laws 

112 

Rulemaking and Interpretive Advice: The Division expects to recommend adoption of 

rules to improve the efficiency and effectiveness of the registration and reporting processes for 

small businesses and implement universal Internet availability of proxy materials. The Division 

also intends to review the results of the pilot extensible Business Reporting Language (XBRL) 

project to determine whether rule proposals are appropriate. Additional rulemaking projects 

will be undertaken as necessary to protect investors, facilitate capital formation, improve and 

simplify disclosure, and eliminate duplicative and unnecessary regulations. 

Goal 2 

Promote Healthy 

Capital Markets 

40 

Goal 3 

Foster Informed 

Investment 

Decisionmaking 

295 

Goal 4 

Maximize the 

use of SEC 

Resources 
Division of Market Regulation 

Executive Summary 

FY 2006 FY 2007 FY 2008 

Actual Estimate Request 

FTE: Headquarters 166 164 164 

Cost: Salaries and Benefits ($000) $28,197.4 $30,122.8 $3 1,744.7 

Non-Personnel Expenses ($000) 13.265.4 12,592.7 12,495.3 

Total Costs ($000) $41,462.8 $42,715.5 $44,240.0 

The Division of Market Regulation's mission is to maintain fair, honest, and efficient 

securities markets. As envisioned by the Securities Exchange Act of 1934 (1934 Act), the 

Commission relies on the self-regulation of the securities industry as the primary method of 

ensuring fair dealing and investor protection, but directly regulates market participants where 

Commission rulemaking is more effective than self-regulation. 

FY 2008 FTE by SEC Strategic Goal 

Securities Firm Supervision: The Division will continue rulemaking efforts related to 

Regulation SHO, Regulation M, and Rule 15c2- 1 1. The staff will consider whether 

confirmations are the best vehicle for providing information to investors and whether other 

sources of information would be more cost-effective. In addition, the SEC will continue to 

review self-regulatory organization (SRO) rule proposals in areas such as sales practices and the 

supervision of personnel and to address issues relating to foreign and domestic transfer agents. 

The staff will provide consolidated supervision to at least five internationally active securities 

firms and review additional applications for such supervision. 

Goal 1 

Enforce 

Compliance 

with Federal 

Securities Laws 

2 6 

Market Supervision: The staff likely will face significant new challenges regarding the 

regulation and supervision of the major securities markets, including analyzing the implications 

of cross-boarder unions of U.S. and non-U.S. self-regulatory organizations. In addition, the 

staff will review the proposed merger of the National Association of Securities Dealers' 

(NASD) and New York Stock Exchange's (NYSE) member regulation functions and aim to 

reduce duplicative regulation in multiple SROs. The SEC also will continue to implement 

initiatives to modernize the national market system and to address self-regulatory organization 

governance and transparency. 

19 

Goal 2 

Promote Healthy 

Capital Markets 

8 7 

Goal 3 

Foster Informed 

Investment 

Decisionmaking 

5 1 

Goal 4 

Maximize the 

use of SEC 

Resources 
Division of Investment Management 

Executive Summary 

FY 2006 FY 2007 FY 2008 

Actual Estimate Request 

FTE: Headquarters 154 147 147 

Cost: Salaries and Benefits ($000) $26,922.4 $27,561.2 $30,058.2 

Non-Personnel Expenses ($000) 15,550.2 16,053.4 15,012.7 

Total Costs ($000) $42,472.6 $43,614.6 $45,070.9 

The Division of Investment Management regulates investment companies and investment 

advisers under two companion statutes, the Investment Company Act of 1940 (Investment 

Company Act) and the Investment Advisers Act of 1940 (Investment Advisers Act). The 

Division seeks to protect investors from fraud, mismanagement, self-dealing, and inadequate 

disclosures by investment companies and investment advisers, without imposing unnecessary 

burdens on regulated entities. 

FY 2008 FTE by SEC Strategic Goal 

The Division's top strategic priority for FY 2008 will be to implement new rules 

designed to provide mutual fund investors with more reader-friendly disclosure and to improve 

the delivery of mutual fund information through increased use of electronic means of delivery, 

including the Internet. The staff also will continue to pursue initiatives to implement the use of 

interactive data that would enable investors to search, analyze, and compare the information in 

fund disclosure documents or financial reports. 

Goal 1 

Enforce 

Compliance 

with Federal 

Securities Laws 

43 

The Division will recommend that the Commission adopt new rules designed to 

eliminate the need to submit applications for exemptive relief that are substantially similar to 

certain previously granted applications. 

The Division will review the disclosures, including financial statements, of one-third of 

investment company portfolios as required by the Sarbanes-Oxley Act of 2002. The staff also 

will review most new portfolios of open-end and closed-end funds, all new insurance contracts, 

most portfolios of new unit investment trusts (UITs), most post-effective amendments that 

reflect material changes in disclosure or fund operations, and almost all proxy statements. 

20 

Goal 2 

Promote Healthy 

Capital Markets 

5 0 

Goal 3 

Foster Informed 

Investment 

Decisionmaking 

54 

Goal 4 

Maximize the 

use of SEC 

Resources 
Office of the General Counsel 

Executive Summary 

FY 2006 FY 2007 FY 2008 

Actual Estimate Request 

FTE: Headquarters 118 117 117 

Regions and Districts - 14 - 13 - 13 

Total 132 130 130 

Cost: Salaries and Benefits ($000) $22,3 18.3 $24,344.1 $25,7 10.0 

Non-Personnel Expenses ($000) 10,185.5 10,263.1 10.218.5 

Total Costs ($000) $32,503.8 $34,607.2 $35,928.5 

The Office of General Counsel (OGC): 

FY 2008 FTE by SEC Strategic Goal 

Serves as counsel to the Commission on all initiatives by the Chairman and the agency's 

divisions and offices; 

Goal 1 

Enforce 

Compliance 

with Federal 

Securities Laws 

7 5 

Defends the Commission in federal district courts; 

Represents the Commission in all appellate matters and amicus curiae filings; 

Goal 2 

Promote Healthy 

Capital Markets 

23 

Advises the Commission and prepares opinions on adjudications; 

Counsels the Commission and its staff on ethics matters; 

Goal 3 

Foster Informed 

Investment 

Decisionmaking 

8 

Represents the Commission in administrative, real estate, labor law, and similar legal 

matters; and 

Goal 4 

Maximize the 

use of SEC 

Resources 

24 

Oversees the Commission's Bankruptcy Program. 

In FY 2008, OGC will continue managing the agency's appellate litigation, including 

appeals related to complex enforcement and other legal matters. OGC expects to review 

appeals to the Commission from registered accounting firms as a result of Public Company 

Accounting Oversight Board (PCAOB) actions and help prosecute violations of attorney ethics 

rules under the Sarbanes-Oxley Act. About 40 adjudicatory matters will be completed, many of 

which will resolve novel legal questions under the federal securities laws. 
Other Program Offices 

FY 2006 FY 2007 FY 2008 

Actual Estimate Request 

FTE: Headquarters 

Office of Chief Accountant 5 4 5 0 5 0 

Office of Inv. Educ. and Assistance 37 36 36 

Office of International Affairs 2 5 2 5 25 

Office of Economic Analysis 2 6 2 5 2 5 

Office of Risk Assessment 5 4 4 

Office of Administrative Law Judges - 12 - 11 - 11 

Total 159 151 151 

Cost: Salaries and Benefits ($000) $26,536.2 $26,123.1 $28,184.4 

Non-Personnel Expenses ($000) 20,38 1.5 15,046.5 14,444.3 

Total Costs ($000) $46,917.7 $41,169.6 $42,628.7 

This section of the SEC's request includes chapters that describe the responsibilities, and 

activities of the agency's smaller program offices, including: 

Office of Chief Accountant: establishes accounting and auditing policy and works to 

improve the professional performance of public company auditors to ensure that financial 

statements used for investment decisions are presented fairly and have credibility. 

Office of Investor Education and Assistance: serves investors who complain to the SEC 

about investment fraud or the mishandling of their investments by securities professionals. 

Office of International Affairs: advances international regulatory and enforcement 

cooperation, promotes converged high regulatory standards worldwide, and facilitates technical 

assistance programs in foreign countries. 

Office of Economic Analysis: serves as chief advisor within the SEC on all economic 

issues associated with its regulatory activities. 

Office of Risk Assessment: helps anticipate, identify, and manage risk. 

Office of Administrative Law Judges: adjudicates allegations of securities law violations. 
Offlce of Chief Accountant 

Executive Summary 

FY 2006 FY 2007 FY 2008 

Actual Estimate Request 

FTE: Headquarters 54 50 50 

The Office of Chief Accountant (OCA) is responsible for establishing, interpreting, and 

enforcing accounting and auditing policy to enhance the transparency and relevancy of financial 

reporting. The Office also works to improve the professional performance of public company 

auditors in order to ensure that financial statements used for investment decisions are presented 

fairly and have credibility. Concerns about the adequacy of accounting standards and the 

quality of independent audits led to major SEC and congressional actions, including passage of 

the Sarbanes-Oxley Act. Such concerns also resulted in accounting standard setting by the 

Financial Accounting Standards Board (FASB) and auditor oversight and regulation by the 

Public Company Accounting Oversight Board (PCAOB), both conducted under SEC oversight. 

FY 2008 FTE by SEC Strategic Goal 

In FY 2008, OCA will continue its oversight of accounting standard setting activities, 

including a major long-term FASB project to simplify and codify its accounting standards. 

OCA also will monitor the FASB's implementation of a more principles-based approach to 

setting accounting standards, as well as issues identified in the staffs study on off-balance sheet 

arrangements. 

Goal 1 

Enforce 

Compliance 

with Federal 

Securities Laws 

11 

OCA, working with the Division of Corporation Finance, intends to continue reviewing 

foreign registrant filings under the International Financial Reporting Standards (IFRS) to help 

the Commission determine whether reconciliation to U.S. accounting standards remains 

necessary. OCA also will continue to assess the benefits of using interactive data under the 

voluntary extensible Business Reporting Language (XBRL) program and to conduct oversight 

of the PCAOB, which is expected to conduct quality reviews of about 225 firms, approximately 

the same number as in FY 2007. In addition, the staff expects to consult on 440 potential 

enforcement investigations, 7 percent more than in FY 2007. 

Goal 2 

Promote Healthy 

Capital Markets 

33 

Goal 3 

Foster Informed 

Investment 

Decisionmaking 

6 

Goal 4 

Maximize the 

use of SEC 

Resources 
Office of Investor Education and Assistance 

Executive Summary 

FY 2006 FY 2007 FY 2008 

Actual Estimate Request 

FTE: Headquarters 37 36 36 

7 

The Office of Investor Education and Assistance (OIEA) serves as the SEC's primary 

point of contact for investors who complain about the possible mishandling of their investments 

by securities professionals, or ask about how the securities industry works and where to find 

information about products, issuers, and industry participants. OIEA also carries out the 

Commission's investor education program by, among other things, producing and distributing 

educational materials, participating in educational events, and consulting with other SEC 

divisions and offices on proposed rulemakings. 

FY 2008 FTE by SEC Strategic Goal 

Investor Assistance: OIEA staff anticipates receiving approximately 77,000 new investor 

complaints, questions, and other contacts, resulting in about 70,000 unique new matters. (Each 

new matter can involve several investor contacts.) The Office likewise will close roughly 

69,000 matters and will increase the percentage of matters closed within seven days to about 83 

percent. 

Goal 1 

Enforce 

Compliance 

with Federal 

Securities Laws 

Investor Education: OIEA staff will continue to carry out the agency's investor education 

programs and provide policy guidance to the SEC's program offices. The Office anticipates 

distributing approximately 300,000 investor brochures. In addition, the SEC's investor 

education web pages will receive approximately 15 million hits. 

The Office will continue to explore new ways to shape and target education initiatives in 

order to maximize their impact among the investing public. For example, OIEA will continue 

its focus on educating seniors about investments commonly marketed to them and tips for 

detecting and avoiding potential frauds and scams. The Office also will continue considering 

alternatives for enhancing the investor education program's ability to reach the nation's 

investors. 

Goal 2 

Promote Healthy 

Capital Markets 

Goal 3 

Foster Informed 

Investment 

Decisionmaking 

36 

Goal 4 

Maximize the 

use of SEC 

Resources 
Off~ce of International Affairs 

Executive Summary 

FY 2006 FY 2007 FY 2008 

Actual Estimate Request 

FTE: Headquarters 25 25 25 

To protect U.S. investors, the SEC works with foreign regulators to improve cross-border 

enforcement cooperation, advance global transparency and disclosure, supervise globally-active 

U.S. firms, and promote high regulatory standards around the world. The Office of 

International Affairs (OIA) achieves these objectives by negotiating and implementing 

information-sharing arrangements for enforcement cooperation, formulating regulatory policy 

for cross-border securities activities, and providing technical assistance to emerging markets. 

FY 2008 FTE by SEC Strategic Goal 

In FY 2008, OIA will: 

Goal 1 

Enforce 

Compliance 

with Federal 

Securities Laws 

11 

Assist the Division of Enforcement in cross-border securities investigations and prosecutions 

and participate in initiatives related to the regulation of globally active financial market 

participants; 

Handle approximately 480 Division of Enforcement inquiries requesting the assistance of 

foreign authorities and approximately 390 requests from foreign authorities for enforcement 

assistance; 

Goal 2 

Promote Healthy 

Capital Markets 

10 

Participate in about 220 international policy matters that aim to promote high regulatory 

standards and strengthen the global marketplace; and 

Respond to approximately 255 technical assistance requests from foreign authorities. 

Goal 3 

Foster Informed 

Investment 

Decisionmaking 

4 

Goal 4 

Maximize the 

use of SEC 

Resources 
Office of Economic Analysis 

Executive Summary 

FY 2006 FY 2007 FY 2008 

Actual Estimate Request 

FTE: Headquarters 26 25 25 

The Office of Economic Analysis (OEA) is the chief adviser to the Commission and its 

staff on all economic and empirical issues associated with the SEC's activities. OEA produces 

high-quality analyses that address the economic issues associated with the regulation of the 

financial markets and conveys that knowledge clearly to those making policy decisions. 

FY 2008 FTE by SEC Strategic Goal 

Support of Rulemakinq: OEA expects rulemaking initiatives to continue at the same 

pace as in FY 2007 and will review about 60 SEC and self-regulatory organization (SRO) rules 

and conduct about 45 regulatory flexibility analyses. The staff also will provide economic 

advice on about 1,000 regulatory and enforcement issues. OEA expects to receive requests for 

analysis of the consequences of rules previously adopted, including assessments of possible 

unintended consequences and their relation to market conditions. 

Goal 1 

Enforce 

Compliance 

with Federal 

Securities Laws 

6 

Enforcement and Inspection: OEA will continue to provide analytical support to the 

Commission and the Division of Enforcement in several areas, including structuring distribution 

plans that have been set up as a result of certain settlement actions and cases involving the 

backdating of employee or executive options. The staff also will offer analytical support to the 

examination program for investment adviser sweeps. 

Risk Management: OEA will support the agency's risk management efforts by providing 

empirical analyses and related expertise to divisions and offices. 

Goal 2 

Promote Healthy 

Capital Markets 

15 

Data: OEA will continue working to identify data analyses that help the agency gauge 

risks, assess regulatory alternatives, measure the impact of previous rules changes, identify 

potential violations of securities laws, and otherwise further the mission of the agency. Data 

sources may include information from investment advisers and registrants that can be analyzed 

more readily using interactive data. 

Goal 3 

Foster Informed 

Investment 

Decisionmaking 

3 

Goal 4 

Maximize the 

use of SEC 

Resources 

1 
Office of Risk Assessment 

Executive Summary 

FY 2006 FY 2007 FY 2008 

Actual Estimate Recluest 

FTE: Headquarters 5 4 4 

The Office of Risk Assessment (OM) is responsible for coordinating the SEC's risk 

management program. ORA focuses on risk issues across the corporate and financial sector, 

including issues relevant to corporate disclosure, market operation, sales practices, new product 

innovation, corporate governance, and many other activities. 

FY 2008 FTE by SEC Strategic Goal 

In FY 2008, the Office intends to strengthen the overall risk management process. ORA 

expects to continue developing new approaches for risk assessment, including technological 

tools, and expanding coordination with the various offices and divisions. 

Goal 1 

Enforce 

Compliance 

with Federal 

Securities Laws 

4 

Goal 2 

Promote Healthy 

Capital Markets 

Goal 3 

Foster Informed 

Investment 

Decisionmaking 

Goal 4 

Maximize the 

use of SEC 

Resources 
Office of the Administrative Law Judges 

Executive Summary 

FY 2006 FY 2007 FY 2008 

Actual Estimate Request 

FTE: Headquarters 12 11 11 

Pursuant to the Administrative Procedure Act and the federal securities laws, 

administrative law judges preside at evidentiary hearings where the Commission has determined 

that public hearings are appropriate, in the public interest, and compatible with the protection of 

investors. The hearings are conducted in a manner similar to non-jury trials in the federal 

district courts. 

FY 2008 FTE by SEC Strategic Goal 

In FY 2008, the administrative law judges plan to dispose of about 85 proceedings, 

issuing 20 initial decisions. The number of proceedings pending will be around 35. 

Goal 1 

Enforce 

Compliance 

with Federal 

Securities Laws 

11 

Goal 4 

Maximize the 

use of SEC 

Resources 

Goal 2 

Promote Healthy 

Capital Markets 

Goal 3 

Foster Informed 

Investment 

Decisionmaking 
Agency Direction and Administrative Support 

FY 2006 FY 2007 FY 2008 

Actual Estimate Request 

FTE: Headquarters 

Agency Direction 

Office of Executive Staff 37 37 37 

Office of Public Affairs 6 6 6 

Office of the Secretary 24 2 5 36 

Office of the Executive Director 6 6 6 

Office of Financial Management 47 48 48 

Office of Human Resources 65 5 9 59 

Office of Administrative Services 84 84 84 

Office of Filings and Info. Svcs. 9 8 93 70 

Office of Information Technology 118 118 130 

Office of Equal Emp. Opportunity 9 9 9 

Office of the Inspector General - 10 - 9 - 9 

Total 504 494 494 

Cost: Salaries and Benefits ($000) $53,004.3 $52,700.7 $53,690.6 

Non-Personnel Expenses ($000) 27,9 15.5 25,365.5 23,259.9 

Total Costs ($000) $80,919.8 $78,066.2 $76,950.5 

This section of the FY 2008 request details the SEC's agency-wide executive activities, 

operations, and administrative functions and covers the following areas: 

Agency Direction: includes the Chairman's and Commissioners' offices, Office of 

Legislative Affairs (OLA), Office of Public Affairs (OPA), and Office of the Secretary. 

Office of the Executive Director: develops and executes agency management policies, 

oversees the allocation and utilization of agency resources, promotes management controls and 

financial integrity, and manages administrative support functions. 

Office of Information Technolonv: manages the Commission's IT program including 

application development, user support, capital planning, security, and enterprise architecture. 

Office of Equal Employment Opportunity: ensures that employees and applicants for 

employment have equal opportunity in employment. 

Office of the Inspector General: conducts internal audits of Commission operations and 

internal investigations into allegations of misconduct by staff or contractors. 
Agency Direction 

Executive Staff 

FY 2006 FY 2007 FY 2008 

Actual Estimate Request 

FTE: Headquarters 

Office of Executive Staff 37 37 37 

Office of the Secretary 24 25 36 

Office of Public Affairs - 6 - 6 - 6 

Total 67 68 79 

Agency Direction is comprised of the Commissioners and their staff, as well as the 

Office of the Secretary, the Office of Legislative Affairs (OLA), and the Office of Public 

Affairs (OPA). The Commissioners' offices address the wide array of legal, financial, 

managerial, legislative, and economic issues encountered in the administration of the federal 

securities laws. The Office of the Secretary schedules Commission meetings; prepares and 

maintains records of Commission actions; reviews documents submitted to the Commission for 

action; and reviews and issues Commission orders, opinions, and releases. OLA works with 

members of Congress and their staff on issues affecting the SEC, while OPA coordinates 

relations with the media, the general public, SEC staff, and foreign visitors. 

FY 2008 FTE by SEC Strategic Goal 

In FY 2008, the Commission anticipates holding about 55 meetings and considering 

about 650 calendar items and 500 seriatim actions, including enforcement actions, rule 

proposals, and other items related to the administration of the federal securities laws. These 

actions will implement the SEC's mission to protect investors, sustain an effective and flexible 

regulatory environment, and facilitate capital formation. 

Goal 1 

Enforce 

Compliance 

with Federal 

Securities Laws 

35 

OLA and OPA expect that their workload will remain stable relative to FY 2007. OLA 

will coordinate the preparations for about 15 Congressional testimonies and handle 

approximately 7,500 telephone and e-mail inquiries from Congressional staff. OPA expects to 

receive about 45,000 media inquiries and draft and distribute about 230 news releases. 

Goal 2 

Promote Healthy 

Capital Markets 

5 

Goal 3 

Foster Informed 

Investment 

Decisionmaking 

28 

Goal 4 

Maximize the 

use of SEC 

Resources 

11 
Ofice of the Executive Director 

Executive Summary 

FY 2006 FY 2007 FY 2008 

Actual Estimate Request 

FTE: Headquarters 

Office of the Executive Director 6 6 6 

Office of Financial Management 47 48 48 

Office of Human Resources 65 5 9 5 9 

Office of Administrative Services 84 84 84 

Office of Filings and Info. Svcs. - 98 - 93 - 70 

Total 300 290 267 

The Office of the Executive Director (OED) oversees the Office of Financial 

Management (OFM), the Office of Administrative Services (OAS), the Office of Human 

Resources (OHR), and the Office of Filings and Information Services (OFIS). 

FY 2008 FTE by SEC Strategic Goal 

Financial Management: OFM staff will complete the SEC's quarterly and annual audited 

financial statements, and continue to enhance management systems and processes to comply 

with current federal accounting and financial reporting requirements. OFM also will continue 

refining the SEC's performance-based budgeting and activity-based costing system, which 

enhances budget formulation and monitors operating costs and cost efficiency. 

Goal 1 

Enforce 

Compliance 

with Federal 

Securities Laws 

30 

Administrative Services: OAS will focus on expanding the use of performance-based 

contracts and strategic sourcing in agency acquisitions, enhancing the SEC's emergency 

preparedness plans, beginning construction of a new child care center at Station Place, and 

strengthening physical security. 

Human Resources: OHR will complete the implementation of a strategically aligned set 

of integrated human capital systems that focus on selection, performance management, 

employee development, and succession planning. These systems will align the SEC with the 

principles of the Human Capital Assessment and Accountability Framework (HCAAF). 

Goal 2 

Promote Healthy 

Capital Markets 

Goal 3 

Foster Informed 

Investment 

Decisionmaking 

39 

Goal 4 

Maximize the 

use of SEC 

Resources 

198 
Off~ice of Information Technology 

Executive Summary 

FY 2006 FY 2007 FY 2008 

Actual Estimate Request 

FTE: Headquarters 118 118 130 

The Office of Information Technology (OIT) will undertake several significant projects 

in FY 2008. These projects will modernize existing processes or implement new tools and 

technology to support SEC staff in their work. 

FY 2008 FTE by SEC Strategic Goal 

Electronic Data Gathering and Retrieval (EDGAR) and Disclosure Review: OIT's efforts 

in this area will center on promoting the use of interactive data to help investors and internal 

staff better use data filed with the SEC. The filings associated with corporate issuers and 

mutual funds will be revised and simplified to reduce the burden on filers and convert additional 

types of information from traditional textual formats to interactive formats such as extensible 

Business Reporting Language (XBRL). 

Goal 1 

Enforce 

Compliance 

with Federal 

Securities Laws 

Enforcement and Examination Management: Both the enforcement and examination 

programs will have their core tracking systems upgraded. As a result, senior management will 

have better access to performance and utilization information to allow them to direct resources 

more effectively, while front-line staff will have better tools for conducting work, managing 

internal workflows, and keeping track of work products. 

Information Security and Disaster Recovery: The SEC will continue to respond to the 

ever-increasing needs for strong protection of agency data, including the need to ensure the 

privacy of data that identifies specific individuals. The primary focus will be on internal 

software development processes and ensuring that information security needs are maintained 

throughout the software development lifecycle. In addition, the SEC will begin implementing a 

new backup site for its centralized information stores and systems, providing additional 

resiliency for the agency's critical functions. 

Goal 2 

Promote Healthy 

Capital Markets 

Goal 3 

Foster Informed 

Investment 

Decisionmaking 

Goal 4 

Maximize the 

use of SEC 

Resources 

130 
Office of Equal Employment Opportunity 

Executive Summary 

FY 2006 FY 2007 FY 2008 

Actual Estimate Request 

FTE: Headquarters 9 9 9 

The Office of Equal Employment Opportunity (EEO) oversees the agency's compliance 

with federal laws that prohibit employment discrimination based on age, color, disability status, 

gender, national origin, race, religion, or sexual orientation, as well as discriminatory retaliation 

against individuals for participating in the EEO process or opposing discrimination. The Office 

also ensures compliance with the requirements of the No FEAR Act of 2002. An essential 

responsibility of the Office is to immediately and appropriately respond to any alleged 

violations of EEO laws, such as harassing conduct or hostile work environments. 

FY 2008 FTE by SEC Strategic Goal 

The SEC has worked to become the "Employer of Choice" with such offerings as pay 

parity, flexible schedules, and improved benefits. In support of this effort, the Office has tried 

to create and support a work environment in which employees are personally satisfied, receive 

fair treatment, have opportunities for advancement, and therefore are motivated to remain with 

the agency. 

Goal 1 

Enforce 

Compliance 

with Federal 

Securities Laws 

Preventative programs will continue to remain a top priority in FY 2008. The staff will 

analyze the FY 2007 EEO program applying the standards set by the Equal Employment 

Opportunity Commission to identify any weaknesses and develop practical solutions to correct 

them. Phase I1 of the Diversity Initiative will continue with full implementation of the 

initiative's various programs. The Office subsequently will evaluate the effectiveness of the 

individual programs and make modifications as necessary. 

Goal 2 

Promote Healthy 

Capital Markets 

Goal 3 

Foster Informed 

Investment 

Decisionmaking 

Goal 4 

Maximize the 

Use of SEC 

Resources 

9 
Office of the Inspector General 

Executive Summary 

FY 2006 FY 2007 FY 2008 

Actual Estimate Request 

FTE: Headquarters 10 9 9 

The work of the SEC's Office of Inspector General (OIG) is driven by the rapid pace of 

significant internal and external changes affecting the current SEC Strategic Plan, and it also 

organizes its audit and inspection work around the goals outlined in the Plan. 

FY 2008 FTE by SEC Strategic Goal 

The OIG will continue its focus on improving SEC operations through audits and 

inspections and enhancing agency integrity by investigating allegations of employee and 

contractor misconduct. 

Goal 1 

Enforce 

Compliance 

with Federal 

Securities Laws 

Through audits, inspections, and investigations, the OIG supports the efforts of the 

Congress and the SEC to hlfill their responsibilities and achieve their goals and objectives with 

respect to oversight of the securities industry. 

Goal 2 

Promote Healthy 

Capital Markets 

Goal 3 

Foster Informed 

Investment 

Decisionmaking 

Goal 4 

Maximize the 

use of SEC 

Resources 

9