U . S . S E C U R I T I E S A N D 

EXCHANGE COMMISSION

Summary of 

Performance and 

Financial Information

FISCAL YEAR 2016
2 | U.S. SECURITIES AND EXCHANGE COMMISSION

FISCAL YEAR 2016

The U.S. Securities and Exchange 

Commission at a Glance

Each year, the SEC produces an Agency Financial Report (AFR) that primarily focuses on financial results, and an Annual 

Performance Report (APR) that reviews strategic goals and performance results, in lieu of a combined Performance 

and Accountability Report. The fiscal year (FY) 2016 APR will be included in the SEC’s FY 2018 Congressional Budget 

Justification available in 2017. 

In addition, the SEC also publishes this Summary of Performance and Financial Information, which is an overview of the AFR. 

Electronic copies of SEC’s reports are available at www.sec.gov/about/secreports.shtml. To comment on these 

reports, email SECAFR@sec.gov.

About the SEC

The SEC is an independent federal agency established 

pursuant to the Securities Exchange Act of 1934 

(Exchange Act).1 The SEC consists of five presidentially-appointed Commissioners—one of whom is designated as the Chair of the Commission—with staggered 

five-year terms. By law, no more than three of the 

Commissioners may belong to the same political party. 

The SEC is responsible for overseeing the nation’s 

securities markets and certain primary participants, 

including broker-dealers, investment companies, investment advisers, clearing agencies, transfer agents, credit 

rating agencies, and securities exchanges, as well as 

organizations such as the Financial Industry Regulatory 

Authority (FINRA), Municipal Securities Rulemaking 

Board, and the Public Company Accounting Oversight 

Board. Under the Dodd-Frank Wall Street Reform 

and Consumer Protection Act of 20102

 (Dodd-Frank 

Act), the agency’s jurisdiction was expanded to include 

certain participants in the derivatives markets, private 

fund advisers, and municipal advisors. 

The SEC’s headquarters are in Washington, DC, and 

the agency has 11 regional offices located throughout 

the country. The agency’s functional responsibilities 

are organized into five divisions and 24 offices, and the 

regional offices are primarily responsible for investigating and litigating potential violations of the securities 

laws. The offices also have examination staff to inspect 

regulated entities such as investment advisers (IA), 

investment companies, and broker-dealers. 

In FY 2016, the SEC employed 4,554 full-time equivalents (FTE), including 4,404 permanent and 150 other 

than permanent FTEs.

Mission

The mission of the SEC is to protect investors, maintain fair, orderly, 

and efficient markets, and facilitate capital formation.

Vision

The SEC strives to promote a securities market environment that is 

worthy of the public’s trust and characterized by:

• Transparent disclosure to investors of the risks of particular 

investments;

• Oversight of key market participants, including exchanges, 

brokers and dealers, investment advisers, and others;

• Focus on strengthening market structure and systems;

• Promotion of disclosure of market-related information;

• Protection against fraud and abuse; and

• Evaluation, development, and maintenance of appropriate

rules and regulations.

Values

Integrity Excellence Accountability

Effectiveness Teamwork Fairness

1

 More information about the Securities Exchange Act of 1934 can be found at www.sec.gov/about/laws/sea34.pdf 2 More information about the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 can be found at 

www.sec.gov/about/laws/wallstreetreform-cpa.pdf

Date issued: January 19, 2017
FY 2016 SUMMARY OF PERFORMANCE AND FINANCIAL INFORMATION | 3

Fiscal Year 2016 in Review

FY 2016 was another year of significant accomplishments for the SEC under the leadership of Chair 

Mary Jo White. 

The SEC rose to the challenges of a growing mandate

and increasingly complex marketplace through innovative strategies for vigorous enforcement; strong and 

effective rulemakings; enhanced examinations and 

oversight; a deepened oversight of the most complex 

and rapidly-evolving corners of the financial markets; 

a focus on enhancing traditional priorities including 

investor education and international cooperation; and 

more efficient operations by the agency itself. 

Ensuring Safer, Stronger Markets 

FOCUSED RULEMAKING

The SEC made advancements toward the adoption and/

or completion of major rulemakings that will help to 

protect investors, facilitate capital formation, and build 

stronger markets. Specifically, the Commission made 

efforts to comply with the following Acts:

Dodd-Frank Act

• Completed all of its mandatory rulemaking in six 

of the eight most significant areas targeted for SEC 

action: 

– Regulation of private fund advisers

– Restrictions on proprietary trading

– Enhanced standards for clearing agencies

– A new regulatory framework for municipal 

advisors

– Enhanced protections for investors in asset-backed 

securities

– Stronger regulation of credit rating agencies and 

credit ratings

• Continued its process of completing final rules in 

the remaining two areas: security-based swaps and 

executive compensation rules, as required; 

• Adopted disclosure rules for resource extraction 

issuers; and

• Issued a staff report on the “accredited investor” 

definition. 

Jumpstart Our Business Startups (JOBS) Act 

• Completed all of its mandatory rulemaking, adopting 

rules to permit companies to offer and sell securities 

through crowdfunding. 

– These rules, which allow companies to raise up to 

$1 million in a 12-month period through crowdfunding offerings, are designed to assist smaller 

companies with capital formation and provide 

investors with important protections. 

Fixing America’s Surface Transportation (FAST) 

Act of 2010 

• Adopted amendments to reporting forms for 

emerging growth companies and smaller reporting 

companies. 

The SEC also continued to propose and adopt rules as 

part of its agenda to address the increasing complexity 

of the asset management industry, including the risks 

that arise from current portfolio compositions and fund 

operations. Specifically, the agency:

• Proposed a rule to modernize the regulation of funds’ 

use of derivatives in December 2015;

• Proposed a rule that would require registered IAs to 

adopt and implement written business continuity and 

transition plans in June 2016; 
4 | U.S. SECURITIES AND EXCHANGE COMMISSION

• Adopted final amendments to Reporting and Dissemination of Security-Based Swap Information in July 

2016, thereby completing its core rules on securitybased swap transaction reporting and dissemination, 

and setting the stage for reporting to commence in 

FY 2017; 

• Adopted the first set of reforms designed to enhance 

the reporting and disclosure of information provided 

by IAs in August 2016; and

• Adopted final rules regarding the access of regulators to data obtained by the security-based swap 

data repositories that will stand at the center of the 

reporting regime in August 2016.

Rooting out financial and disclosure fraud 

must be a priority for Enforcement—and 

FY 2016 was no exception.

Transformative Policy Initiatives 

The SEC made significant progress in its disclosure 

effectiveness initiative, which is a broad-based review of 

the presentation and delivery of disclosures that public 

companies make to investors to make them better and 

more meaningful for investors and more cost effective 

for companies, in addition to addressing products and 

practices that contributed directly to the financial crisis.

• Through its annual review program of the filings 

of over 4,800 public companies, the Division of 

Corporation Finance (Corporation Finance) issued 

focused comments on periodic reports and offering 

documents, including the registration statements for 

approximately 400 initial public offerings. 

• The Division of Investment Management’s (IM) 

Disclosure Office also reviewed and commented on 

disclosures in more than 4,800 filings relating to 

more than 12,000 registered investment companies, 

business development companies, and insurance 

contracts.

• Collaboratively, the agency also continued its 

efforts to:

– Strengthen the operational integrity of the 

securities markets with the full implementation of 

Regulation Systems Compliance and Integrity on 

November 3, 2015; 

» To complement this effort, the Commission 

approved rules from the national securities 

exchanges and the FINRA designed to address 

specific areas in which the robustness and 

resilience of critical market infrastructure can be 

improved for the equity and options markets.

– Enhance oversight and operation of the markets, 

as well as the transparency of key market operations for investors;

– Advance its consideration of broader market structure changes, including those raised in meetings of 

the Equity Market Structure Advisory Committee 

that provides a formal mechanism through which 

the Commission can receive advice and recommendations specifically related to equity market 

structure issues; and

– Implement statutory mandates designed to 

enhance and facilitate securities offerings, in 

addition to undertaking discretionary measures 

to further promote capital formation, especially 

for smaller issuers.

Impact and Innovation in Enforcement 

Comprehensive, accurate, and reliable financial reporting is the bedrock upon which our markets are based. 

Because of this, rooting out financial and disclosure 

fraud must be a priority for the Division of Enforcement (Enforcement)—and FY 2016 was no exception. 

Enforcement continued to prioritize market structure 

issues—particularly those involving Alternative Trading 

Systems, abusive trading, cyber issues, and the dissemination of false information to the market—in addition 

to pursuing corporate insiders, employees of regulated 
FY 2016 SUMMARY OF PERFORMANCE AND FINANCIAL INFORMATION | 5

entities, and other individuals who misappropriate or 

trade unlawfully on material, nonpublic information. 

Through Enforcement, the SEC:

• Ended the fiscal year with a record 548 stand-alone 

enforcement actions, plus 195 follow-on proceedings 

and 125 delinquent filing proceedings, for a total of 

868 enforcement actions; 

• Obtained judgments and orders for over $4 billion in 

penalties and disgorgement; 

• Charged 78 parties in insider trading actions, which 

brings wrongdoers to account and sends a strong 

message of deterrence to would-be violators;

• Continued to prioritize cases against gatekeepers; 

• Brought innovative and path-breaking actions in the 

municipal securities market, including actions against 

14 municipal underwriting firms and 71 municipal 

issuers and others for violations in municipal bond 

offerings as part of the Municipalities Continuing 

Disclosure Cooperation Initiative, a voluntary selfreporting program targeting material misstatements 

and omissions in municipal bond offering documents;

• Brought the most-ever cases involving investment 

advisers or investment companies (160);

• Reached new heights in the enforcement of antibribery and anticorruption laws in by bringing the 

most-ever Foreign Corrupt Practices Act-related 

enforcement actions (21);

• Succeeded in bringing a number of first-of-its-kind 

actions involving complex financial instruments;

• Took strong action to combat the scourge of stock 

manipulation using a technology- and data-driven 

approach, targeting a variety of manipulation 

schemes—particularly those involving online intrusions, false statements via social media, and false 

regulatory filings;

• Broadened its efforts to combat microcap fraud to 

encompass significant actions involving gatekeepers 

and professionals associated with microcap frauds;

• Continued to protect investors by filing a number 

of actions targeting securities offerings that included 

registration violations and offering frauds, and by 

thwarting Pyramid and Ponzi schemes;

• Awarded over $57 million to 13 whistleblowers 

through its whistleblower award program, which is 

more than all previous years combined; and

• Harnessed data through innovative analytical tools.

– Enforcement’s Center for Risk and Quantitative 

Analytics supported, coordinated, and enhanced 

the division’s risk-identification, risk assessment, 

and data analytic activities in over 75 matters, 

including actions against 67 entities. The matters 

involved, among other things, insider trading, 

hedge funds, municipal issuers, and complex 

financial instruments. 

Excellence in the Examination Program 

The population of IAs has grown rapidly in recent 

years: More than 2,000 new advisers have registered 

with the SEC over the past two years, and the Office 

of Compliance Inspections and Examinations (OCIE) 

continued to identify and prevent fraud and other 

misconduct through examinations. When OCIE 

uncovers information in an examination that establishes 

or suggests misconduct, examiners refer the matter to 

Enforcement for investigation and potential enforcement actions. In FY 2016, OCIE:

• Conducted more than 2,400 examinations of 

regulated entities, which is an increase of more than 

20 percent over FY 2015, and is the highest number 

of examinations in the preceding seven fiscal years;

– OCIE’s examinations resulted in the voluntary 

return of more than $60 million to investors.

• Completed more than 1,600 exams through its 

Investment Adviser/Investment Company examination program (IA/IC), an increase of 20 percent over 

FY 2015;
6 | U.S. SECURITIES AND EXCHANGE COMMISSION

The Division of Economic and Risk Analysis 

(DERA) continued to expand the critical role 

that it plays within the SEC by producing 

high-quality, data-driven analyses.

• Took steps to increase staff in the IA/IC examination 

program by approximately 20 percent through 

targeted hiring and redeployment of staff from other 

examination program areas; 

– These changes became effective at the beginning 

of FY 2017.

• Created the Office of Risk and Strategy (ORS) to 

consolidate the various teams that perform risk 

assessment, monitoring, and surveillance of regulated 

entities; 

– ORS creates synergies from these teams’ varying 

expertise, and allows for closer collaboration, 

including with examiners.

• Conducted over 150 outreach conferences with the 

industry and securities regulators both regionally 

and nationally;

• Made approximately 200 referrals to Enforcement; 

and

• Appeared at more than 150 events in order to 

promote transparent communication and coordination among industry participants and regulators.

Economic and Risk Analysis

The Division of Economic and Risk Analysis (DERA) 

continued to expand the critical role that it plays within 

the SEC by producing high-quality, data-driven analyses 

that address the economic issues associated with the 

regulation of the financial markets and the enforcement 

of federal securities laws. 

DERA’s support for the SEC’s programs fell into three 

main categories: informing policymaking; supporting 

inspections and enforcement; and enhancing access to, 

and usability of, data.

• DERA’s analytic tools and analyses enable the proactive detection of market risks indicative of possible 

violations of the federal securities laws.

• DERA directly supports Enforcement in investigating 

and prosecuting wrongdoing through rigorous, 

quantitative analyses that help identify violations of 

securities laws and measure harm to investors. 

• DERA worked to develop solutions that help make 

information accurate, timely, useful, and accessible. 

– Structured data reporting provides easier 

access for the Commission and users to key 

information about registrants, their practices, 

and their offerings. 

• DERA worked closely with other offices and divisions 

to design data structuring approaches for required 

disclosures, and supported the SEC’s data collections 

and data usage by designing taxonomies, validation 

rules, data quality assessments, and data dissemination tools to facilitate high-quality data analyses. 

– Evaluating the appropriateness of machine-readable structured data formats is now a routine part 

of the rulemaking process.

• DERA was instrumental in the ongoing development 

of Inline XBRL, which has the potential to provide 

a number of benefits to filers and users of structured 

financial information.

Protecting Investors through Education 

The Office of Investor Education and Advocacy (OIEA) 

continued to support the Commission’s investor 

protection mission by: 

• Launching the SEC’s first-ever nationwide public 

service campaign; 

• Modernizing the Investor.gov website, which now 

serves as the SEC’s primary landing page for retail 

investors who wish to conduct an investment professional background search; and 

• Publishing a variety of important investor alerts and 

bulletins warning investors of possible fraudulent 

schemes, and educating them on investment-related 

matters, handling investment-related complaints and 

questions from individual investors, and participating 
FY 2016 SUMMARY OF PERFORMANCE AND FINANCIAL INFORMATION | 7

in over 100 in-person events focused primarily on 

senior citizens, military personnel, millennials, and 

affinity groups. 

International Collaboration

The Office of Investor Advocacy (OIA) used its expertise to provide guidance to Enforcement on foreign 

practice and procedure and to raise enforcement 

cooperation standards and best practices worldwide. 

In FY 2016, OIA continued to:

• Work with international counterparts bilaterally and 

through the International Organization of Securities 

Commissions, the Financial Stability Board, and 

other international bodies to coordinate international 

approaches in key regulatory areas and advance SEC 

policy objectives;

• Support the cross-border supervisory efforts of other 

SEC divisions and offices by coordinating on-site 

visits to SEC-regulated firms located outside the U.S., 

helping examinations staff obtain access to records 

held in foreign jurisdictions, and assisting with asset 

verification requests to offshore banks, custodians, 

and fund administrators; and

• Help foreign authorities with their investigations by 

securing information located in the U.S., including 

obtaining formal orders to compel testimony. 

– OIA’s enforcement cooperation and assistance 

team handled 1,027 requests from Enforcement 

for international assistance and 636 requests 

for assistance from foreign regulatory and law 

enforcement authorities.

– The SEC’s international technical assistance 

program provided training on enforcement, 

examinations, and market development to approximately 2,145 persons from the SEC’s international 

regulatory and law enforcement counterparts. 

Operational Support

Collectively, the offices and functions that comprise 

the Office of the Chief Operating Officer (OCOO) 

organization continued to provide strategic leadership, oversight, and stewardship of the SEC’s human, 

financial, technological, and administrative resources, 

thus ensuring that key infrastructure and operational 

activities enable the agency to accomplish its mission. 

• The Office of Acquisitions (OA) returned more 

than $40 million to the SEC by de-obligating funds 

from existing and expired contracts, and obligated 

contracts in excess of $470 million. 

– OA also awarded enterprise agreements, creating 

long-term strategic partnerships with vendors and 

reducing lead time to contract award. 

• The Office of Human Resources (OHR) continued 

to implement a comprehensive talent management 

approach for the agency in order to attract, develop, 

motivate, and retain productive, engaged employees. 

• The Office of Information Technology (OIT) achieved 

significant operational efficiencies through streamlined operations and by leveraging existing assets.

• The Office of Financial Management (OFM) 

advanced several technology initiatives to improve 

financial operations, internal controls, and service to 

registrants and internal customers.

• In October 2015, OCOO established the Office of 

Strategic Initiatives (OSI) with the purpose of managing specific agency-wide functions and key strategic 

programs. 

• The Office of Support Operations (OSO) implemented numerous requirements of the Freedom of 

Information Improvement Act of 2016 and adopted 

the “Capstone approach” in compliance with 

Presidential Management Directive (M-12-18), which 

ensures that emails sent or received by high-level 

officials will be permanently retained. 
8 | U.S. SECURITIES AND EXCHANGE COMMISSION

Fiscal Year 2016 Performance Highlights

The SEC’s performance data provides a foundation for 

both programmatic and organizational decision-making and is critical for gauging the agency’s success in 

meeting its objectives. The SEC is committed to using 

performance management best practices to promote 

greater accountability. 

The SEC’s FY 2016 APR will be issued with the 

agency’s FY 2018 Congressional Budget Justification, 

and will provide a complete discussion of all of the 

agency’s strategic goals, including a description of 

performance goals and objectives, data sources, 

performance results and trends, and information about 

internal reviews and evaluations. 

The SEC’s FY 2016 strategic and performance planning 

framework is based on the FY 2014 – FY 2018 Strategic Plan, available at www.sec.gov/about/sec-strategicplan-2014-2018.pdf. 

The Strategic Plan outlines the agency’s mission, vision, 

values, strategic goals, and strategic objectives. The 

SEC’s work is structured around four strategic goals 

and the 12 strategic objectives the agency plans to 

achieve in support of those four goals. The SEC’s goals 

and priorities in the Strategic Plan are influenced by 

several external environmental factors, including global, 

complex, and constantly evolving securities markets.

The following is a list of the SEC’s strategic goals and 

objectives and a summary of the agency’s FY 2016 

results for its key performance goals.

Strategic Goals and Strategic Objectives 

STRATEGIC GOAL 1: Establish and maintain an effective 

regulatory environment

STRATEGIC OBJECTIVE 1.1: The SEC establishes and 

maintains a regulatory environment that promotes 

high-quality disclosure, financial reporting, and 

governance, and that prevents abusive practices 

by registrants, financial intermediaries, and other 

market participants.

STRATEGIC OBJECTIVE 1.2: The SEC promotes 

capital markets that operate in a fair, efficient, 

transparent, and competitive manner, fostering 

capital formation and useful innovation.

STRATEGIC OBJECTIVE 1.3: The SEC adopts and 

administers regulations and rules that are informed 

by robust economic analysis and public comment 

and that enable market participants to understand 

clearly their obligations under the securities laws.

STRATEGIC OBJECTIVE 1.4: The SEC engages 

with a multitude of stakeholders to inform and 

enhance regulatory activities domestically and 

internationally.
FY 2016 SUMMARY OF PERFORMANCE AND FINANCIAL INFORMATION | 9

STRATEGIC GOAL 2: Foster and enforce compliance with 

the federal securities laws 

STRATEGIC OBJECTIVE 2.1: The SEC fosters compliance with the federal securities laws.

STRATEGIC OBJECTIVE 2.2: The SEC promptly 

detects and deters violations of the federal 

securities laws.

STRATEGIC OBJECTIVE 2.3: The SEC prosecutes 

violations of federal securities laws and holds 

violators accountable through appropriate 

sanctions and remedies.

STRATEGIC GOAL 3: Facilitate access to the information 

investors need to make informed investment decisions 

STRATEGIC OBJECTIVE 3.1: The SEC works to 

ensure that investors have access to high-quality 

disclosure materials that facilitate informed investment decision-making.

STRATEGIC OBJECTIVE 3.2: The SEC works to 

understand investor needs and educate investors 

so they are better prepared to make informed 

investment decisions.

STRATEGIC GOAL 4: Enhance the Commission’s performance through effective alignment and management of 

human, information, and financial capital 

STRATEGIC OBJECTIVE 4.1: The SEC promotes a 

results-oriented work environment that attracts, 

engages, and retains a technically proficient and 

diverse workforce, including leaders who provide 

motivation and strategic direction.

STRATEGIC OBJECTIVE 4.2: The SEC encourages 

a collaborative environment across divisions and 

offices and leverages technology and data to fulfill 

its mission more effectively and efficiently.

STRATEGIC OBJECTIVE 4.3: The SEC maximizes the 

use of agency resources by continually improving 

agency operations and bolstering internal controls. 
10 | U.S. SECURITIES AND EXCHANGE COMMISSION

Key Performance Achievements

One of the agency’s primary objectives is to maintain a regulatory framework that enables market participants to 

understand their obligations (Strategic Objective 1.3). The SEC devotes resources from the Divisions of Trading and 

Markets (TM), Investment Management (IM), and Corporation Finance to respond to no-action letters, exemptive 

applications, and interpretive and other requests from regulated entities, public companies, and other outside parties. 

In FY 2016, TM, IM, and Corporation Finance met or exceeded their response rate targets (Performance Goal 1.3.1). 

PERFORMANCE GOAL 1.3.1—Length of time to respond to written requests for no-action letters (NAL), exemptive 

applications, and written interpretive requests

Description: The SEC staff responds to requests for guidance from individuals and market participants about specific provisions of the 

federal securities laws. These queries may seek interpretations of the securities laws or regulations, or assurances that no enforcement 

action will be taken if the individual or market participant engages in a specified activity. The staff also reviews applications for exemptions 

from the securities laws. Written responses to such requests for guidance, when provided, generally are publicly available, as are applications and related notices and orders, when issued. This metric gauges the timeliness of initial comments issued by the Divisions of Trading 

and Markets, Investment Management, and Corporation Finance. 

Fiscal Year FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

FY 2016

Plan

FY 2016 

Actual

FY 2016 

Results

Division of Trading and Markets

Percentage within required timeframe 98.5% 89% 93% 83% 88% 80% 81% Exceeded

Responsible Division/Office: Division of Trading and Markets

Data Source: TM Request Tracking Log 

Division of Investment Management

Exemptive applications 100% 100% 99% 99% 100% 80% 100% Exceeded

Responsible Division/Office: Division of Investment Management 

Data Source: Microsoft Office Suite Tools

Division of Corporation Finance

No-action letters and interpretive requests 97% 98% 98% 97% 94% 90% 93% Exceeded

Shareholder proposals 100% 100% 100% 100% 100% 100% 100% Met

Responsible Division/Office: Division of Corporation Finance 

Data Source: Division NAL database and Division Shareholder Proposal database 

Building and maintaining examination coverage of the industry helps the Commission promptly detect violations of 

federal securities laws and promote compliance with such laws (Strategic Objective 2.2). Overall, the agency’s National 

Examination Program (NEP) met expectations and continued to increase examination levels (Performance Goal 2.2.1). 

PERFORMANCE GOAL 2.2.1—Percentage of investment advisers, investment companies, and broker-dealers examined 

during the year

Description: This metric indicates the number of registrants examined by the SEC or an SRO as a percentage of the total number of 

registrants. This metric includes all types of examinations: risk priority examinations, cause inspections to follow up on tips and complaints, 

limited-scope special inspections to probe emerging risk areas, and oversight examinations of broker-dealers to test compliance and the 

quality of examinations by FINRA.

Fiscal Year FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

FY 2016

Plan

FY 2016 

Actual

FY 2016 

Results

Investment advisers 8% 8% 9% 10% 10% 11% 11% Met

Investment companies 13% 12% 11% 10% 15% 15% 17% Exceeded

Broker-Dealers (exams by SEC and SROs) 58% 49% 46% 49% 51% 50% 50% Met

Responsible Division/Office: Office of Compliance Inspections and Examinations

Data Source: Tracking and Reporting Exam National Documentation System (TRENDS) (investment adviser [IA], investment company 

[IC], and broker-dealer [BD] SEC data) and SRO Databases (BD self-regulatory organization [SRO] Data) 
FY 2016 SUMMARY OF PERFORMANCE AND FINANCIAL INFORMATION | 11

Key parts of investor protection are to quickly and appropriately sanction those who prey on investors and to 

successfully litigate cases (Strategic Objective 2.3). Enforcement strives to obtain swift and strong judgment orders, 

consistent with fairness and due process. The SEC has implemented controls and strategies to resolve actions quickly 

and on a favorable basis, while at the same time, it does not hesitate to file matters on a contested basis where a 

favorable settlement was unavailable before filing (Performance Goal 2.3.1).

PERFORMANCE GOAL 2.3.1

Percentage of enforcement actions in which the Commission obtained relief on one or more claims

Description: This metric identifies, as to all parties to enforcement actions that were resolved in the fiscal year, the percentage against 

whom the Commission obtained a judgment or order entered on consent, a default judgment, a judgment of liability on one or more 

charges, and/or the imposition of monetary or other relief.

Fiscal Year FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

FY 2016

Plan

FY 2016 

Actual

FY 2016 

Results

Percentage 93% 89% 93% 94% 95% 92% 97% Exceeded

Responsible Division/Office: Division of Enforcement

Data Source: HUB case management and tracking system for the Division of Enforcement 

The federal securities laws place great emphasis on assuring that corporations, investments companies, and other 

entities provide investors with timely, clear, complete, and accurate financial and non-financial information, allowing 

investors to make wise investment decisions (Strategic Objective 3.1). Consistent with Section 408 of the Sarbanes 

Oxley-Act of 2002, the SEC completed its review of disclosures made by certain public issuers, including issuers’ 

financial statements, no less frequently than once every three years (Performance Goal 3.1.1).

PERFORMANCE GOAL 3.1.1

Percentage of public companies and investment companies with disclosures reviewed each year

Description: The Sarbanes-Oxley Act requires that the SEC review, at least once every three years, the disclosures of all companies and 

investment company portfolios reporting under the Exchange Act. These reviews help improve the information available to investors and 

may identify possible violations of the federal securities laws. This metric gauges the number of public companies and investment companies reviewed each year.

Fiscal Year FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

FY 2016

Plan

FY 2016 

Actual

FY 2016 

Results

Division of Investment Management

Investment Company Portfolios 33% 36% 34% 35% 35% 33% 36% Exceeded

Responsible Division/Office: Division of Investment Management

Data Source: Microsoft Office Suite Tools 

Division of Corporation Finance

Corporations 48% 48% 52% 52% 51% 33% 56% Exceeded

Responsible Division/Office: Division of Corporation Finance 

Data Source: Electronic, Data Gathering, Analysis, and Retrieval (EDGAR)/Filing Activity Tracking System
12 | U.S. SECURITIES AND EXCHANGE COMMISSION

Management Assurances and Compliance with Laws

In FY 2016, the SEC demonstrated its continued 

commitment to maintaining strong internal controls. 

Internal control is an integral component of effective 

agency management, providing reasonable assurance 

that the following objectives are being achieved: 

effectiveness and efficiency of operations; reliability of 

reporting; and compliance with laws and regulations. 

The Federal Managers’ Financial Integrity Act of 1982 

(FMFIA) establishes management’s responsibility to 

assess and report on internal accounting and administrative controls. Section 963 of the Dodd-Frank Act 

describes the responsibility of SEC management to 

establish and maintain adequate internal controls and 

procedures for financial reporting.

In FY 2016, the SEC demonstrated its 

continued commitment to maintaining 

strong internal controls.

ASSURANCE STATEMENT ON INTERNAL CONTROL 

OVER OPERATIONS: The SEC’s management is responsible for establishing and maintaining effective internal 

controls that meet the objectives of the FMFIA. In 

accordance with Office of Management and Budget 

(OMB) Circular A-123, Management’s Responsibility 

for Enterprise Risk Management and Internal Control, 

the SEC conducted its annual assessment of the effectiveness of internal controls. Based on the results of the 

assessment for the period ending September 30, 2016,

the SEC is able to provide reasonable assurance that the 

internal controls for the agency meet the objectives of 

the FMFIA. No material weaknesses were found in the 

design or operation of the internal controls for the fiscal 

year ended September 30, 2016.

ASSURANCE STATEMENT ON INTERNAL CONTROL 

OVER FINANCIAL REPORTING: In accordance with 

OMB Circular A-123 Appendix A, Internal Control 

Over Reporting, the SEC conducted its assessment 

of the effectiveness of internal control over financial 

reporting, which includes safeguarding of assets and 

compliance with applicable laws and regulations. Based 

on the results of the assessment, the SEC is able to 

provide reasonable assurance that internal controls over 

financial reporting, both for the agency as a whole and 

for the Investor Protection Fund, met the objectives of 

FMFIA and were operating effectively as of September 

30, 2016. No material weaknesses were found in the 

design or operation of controls. 

The SEC also conducted reviews of its financial 

management systems in accordance with OMB Circular 

A-123 Appendix D, Compliance with the Federal 

Financial Management Improvement Act (FFMIA). 

Based on the results of these reviews, the SEC can 

provide reasonable assurance that its financial management systems substantially comply with the requirements of the FFMIA as of September 30, 2016.
FY 2016 SUMMARY OF PERFORMANCE AND FINANCIAL INFORMATION | 13

Summary of Financial Statement Audit

AUDIT OPINION: Unmodified

RESTATEMENT: No

Independent Auditor’s Internal Control Findings

Category FY 2016 Audit Finding

Material Weaknesses None

Significant Deficiencies None

Category FY 2015 Audit Finding

Material Weaknesses None

Significant Deficiencies None

For FY 2016, the independent auditor, the U.S. Government Accountability Office (GAO), released an unmodified opinion of our financial statements and internal 

controls, in which no significant issues were identified. 

The SEC successfully maintained a strong internal 

control posture through the hard work and dedication 

of staff in OFM, OIT, and the agency as a whole. 

While the agency is pleased with these results, the SEC 

nevertheless remains committed to making further 

improvements to its internal controls environment. 

A key ongoing priority for OFM is to build out its 

in-house internal controls program, aimed toward the 

early identification and resolution of internal control 

issues. The SEC will also continue to formalize its 

enterprise risk management program in response to 

updated guidance from GAO and OMB. 

In addition, the SEC will continue to focus its energies 

on modernizing the technology systems supporting key 

areas of our finances.
14 | U.S. SECURITIES AND EXCHANGE COMMISSION

Inspector General’s Statement on 

Management and Performance Challenges

The Reports Consolidation Act of 2000 requires the 

SEC OIG to identify and report annually on the most 

serious management challenges that the SEC faces. 

To varying degrees, the management and performance 

challenges include:

• Meeting Expanded Regulatory Oversight 

Responsibilities

• Ensuring an Effective Information Security Program

• Improving Contract Management

• Ensuring Effective Human Capital Management

Details of the challenges and corresponding audit, 

evaluation, investigation, or review work is discussed 

in The Inspector General’s Statement on the 

SEC’s Management and Performance Challenges, 

October 2016.

3

In prior years, the OIG reported that Financial Management also posed a management and performance 

challenge for the agency primarily due to significant 

deficiencies and other financial reporting internal 

control weaknesses that were identified through GAO’s 

annual financial statement audit. During FY 2015, the 

SEC made progress in addressing those deficiencies, 

specifically in the agency’s accounting for disgorgement 

and penalty transactions, such that GAO no longer 

considers the remaining control deficiencies in this 

area to represent a significant deficiency as of 

September 30, 2015. Accordingly, the OIG removed 

Financial Management from this year’s statement. 

Management’s Response to the Inspector 

General’s Statement 

The SEC remains committed to enhancing the 

programmatic and operational effectiveness of the 

agency and appreciates the OIG’s role in this effort. 

The SEC has actions—both taken and planning to 

be taken—that will address each of the challenges 

identified in the statement.

3 The Inspector General’s Statement on the SEC’s Management and Performance Challenges, October 2016, can be found at 

https://www.sec.gov/oig/reportspubs/Inspector-Generals-Statement-on-the-SECs-Management-and-Performance-Challenges.pdf
FY 2016 SUMMARY OF PERFORMANCE AND FINANCIAL INFORMATION | 15

Fiscal Year 2016—Financial Highlights

FY 2016 Sources of Funds

FY 2016 Assets by Type

Selected Financial Data for FY 2016 and FY 2015

(DOLLARS IN MILLIONS) 2016 2015

Total Assets $ 11,652 $ 11,456

Total Liabilities $ 4,015 $ 3,773

Net Position $ 7,637 $ 7,683

Annual Net Position Change 0% 0%

Total Program Costs $ 1,736 $ 1,584

Revenues $ 1,975 $ 2,070

Net (Income) Cost from Operations $ (239) $ (486)

Total Budgetary Resources $ 1,879 $ 1,713

Actual FTEs at FY End 4,554 4,301

Sequestration Order for FY 2016 

On March 1, 2013, the President issued the Sequestration Order for FY 2013 that reduced budget authority. 

As determined by OMB, for FY 2016, the Sequestration 

Order was applicable to mandatory appropriations, 

which included the Securities and Exchange Commission Reserve Fund (Reserve Fund) and the Investor 

Protection Fund.

For example, in FY 2016 the Reserve Fund’s budget 

authority of $75 million was reduced by 6.8 percent, or 

$5.1 million.

Reserve Fund

Section 991(e) of the Dodd-Frank Act authorized the 

creation of a Reserve Fund. Funded from filing fee 

collections, the SEC can deposit up to $50 million per 

fiscal year, and the fund cannot hold more than $100 

million in total. Excess filing fees are deposited to the 

U.S. Treasury General Fund. 

For the year ended September 30, 2016, filing fee 

revenues totaled $489 million. Fifty million dollars was 

deposited into the Reserve Fund, of which $5 million 

was sequestered. The remainder of $439 million was 

earned on behalf of the U.S. Treasury General Fund.

Filing fees deposited to the Reserve Fund can be used to

fund the SEC’s operations, create budgetary authority, 

and are reported as a component of Appropriations 

(Discretionary and Mandatory) on the SEC’s Statement 

of Budgetary Resources. Filing fees deposited in the 

U.S. Treasury General Fund cannot be used to fund the 

SEC’s operations. These amounts do not create budgetary authority, and are reported as a component of 

Other Financing Sources: Other on the SEC’s Statement 

of Changes in Net Position.

Spending 

Authority from

Offsetting 

Collections

Unobligated 68%

Balance, Brought

Forward, October 1—

Without Unfunded 

Lease Obligations

21%

Recoveries of

Prior Year

Unpaid 

Obligations

3% Appropriations

8%

Percentages do not include the Unobligated Balance Brought 

Forward, October 1—Interpretation for Lease Obligations

Fund Balance 

with Treasury

Investments

Disgorgements 

—

65%

and Penalties Fund

22%

Investments—

Investor 

Protection Fund

3%

Accounts 9% Receivable, Net

Property and 

Other Assets

1%
16 | U.S. SECURITIES AND EXCHANGE COMMISSION

Liability for 

Disgorgement 

and Penalties

77%

Custodial 

Liability

16%

Accrued Payroll, 

Benefits, and 

Leave

3%

Accounts 2% Payable

Registrant 1%Deposits

Other Liabilities

1%

FY 2016 Liabilities by Type

FY 2016 Program Costs

Total Program Costs were $1.7 billion for the period 

ended September 30, 2016—an increase of $152 

million, or 10 percent, compared to FY 2015. Salary 

and Benefit Expenses increased more than $115 million 

as a result of increased staffing, compensation, and 

benefits. Other Expenses increased more than $37 

million, which includes $27 million in accrued expenses 

for whistleblower award payments from the SEC’s 

Investor Protection Fund, and $29 million in additional 

expenses for contractual services. 

Enforcement

35%

Compliance 

Inspections and 

Examinations

22%

Corporation Finance

9%

Trading and 

Markets

5%

Agency Direction and 12% Administrative Support

Inspector 

General

1%

Investment

Management

4%

Economic 

and Risk 

Analysis

4%

General 

Counsel

3%

5%

The SEC had increased expenses in the areas of personnel compensation and benefits as a result of an increase 

in the hiring of FTEs; IT service contracts and licensing; 

capitalized and non-capitalized information systems 

software and hardware; and whistleblower award

payments.

Investor Protection Fund

The SEC prepares stand alone financial statements 

for the Investor Protection Fund, as required by the 

Dodd-Frank Act. The fund was established in FY 2010 

to provide funding for a whistleblower award program 

and to finance the operations of the SEC OIG’s 

Employee Suggestion Program. Sanctions collected 

by the Commission payable either to the SEC or the 

U.S. Treasury General Fund will be transferred to the 

Investor Protection Fund if the balance in that fund is 

less than $300 million on the day of collection.

Investor Protection Fund Activity

For the years ended September 30, 2016 and 2015

(DOLLARS IN THOUSANDS) 2016 2015

Balance of fund at beginning of 

fiscal year, October 1 $ 387,111 $ 414,660

Amount of earnings on investments 

during the fiscal year 2,413 867

Amount paid from the fund during 

the fiscal year to whistleblowers (55,122) (28,397)

Amount paid from the fund during 

the fiscal year for expenses 

incurred by Employee 

Suggestion Program (44) (19)

Balance of the fund at the end of 

the reporting period $ 334,358 $ 387,111

Note: Table is presented as “Dollars in Thousands” in order to detail Investor 

Protection Fund activity.

FY 2016 Program Costs