Strategic Plan 

U. S . S e c u r i t i e s a n d E x c h a n g e C o m m i s s i o n

F I S C A L Y E A R S 2 0 1 0 – 2 0 1 5

Planning for the Future
Strategic Plan for Fiscal Years 2010–2015 i

This document represents the U.S. Securities and Exchange Commission’s fourth strategic 

plan prepared in accordance with the Government Performance and Results Act of 1993. 

The plan sets out the Commission’s mission, vision, values, and strategic goals for fiscal years 

2010 through 2015. After the plan surveys the forces shaping the SEC’s environment, it then 

details the outcomes the agency is seeking to achieve, the strategies and initiatives that will 

be undertaken to accomplish those outcomes, and the performance measures that will be used 

to gauge the agency’s progress.

Comments on this Strategic Plan should be directed to strategicplan@sec.gov.
Strategic Plan for Fiscal Years 2010–2015 iii

Message from the Chairman

Protecting investors is our core mission. And, everything we do is with that goal in mind.

When we shut down an insider trading scheme, we are protecting investors. When we 

detect fraud during an examination, we are protecting investors. When we adopt rules or 

provide guidance to ensure fair markets or to provide investors with the information that they 

need, we are protecting investors. 

And, when we devised our Strategic Plan for 2010-2015, investor protection was the 

thread woven throughout. 

It makes sense because the SEC’s success as the nation’s securities market regulator rests 

squarely on our ability to establish and maintain a market in which the interests of investors 

are paramount. 

This Strategic Plan is ambitious. Through the activities described, we are committing 

ourselves to even stronger enforcement of our securities laws; even more focus on fair and 

transparent markets; even tougher oversight of those market participants that are registered 

with the Commission; even higher quality investor-oriented information; and even more 

effective use of our own resources.

Successful implementation of this Plan will require two things. First, internally, we must 

continue to drive ourselves as hard as possible. We must maintain our investor-first focus, and 

must continue to look for ways to build our expertise while also increasing our effectiveness. 

Second, we must have access to sufficient resources to hire the necessary staff, obtain the 

necessary expertise, and secure the necessary technology. As is more fully described in the 

“Resources” section of the Plan, adequate budgets, over the long run are essential. 

The Plan also outlines specific performance metrics. Many of the measures reflect 

new and innovative approaches for gauging how we are doing as an agency.  Collectively, 

these measures take a much broader view of the work of the agency and the impact it has 

in fulfilling its mission.  We will track our performance against these metrics, and report 

annually on how we are doing. 

This Plan was prepared with significant involvement of our staff, and I thank them for 

their continued dedication. I also urge each employee to take this Plan to heart; let it guide 

each of us as we continue to work for America’s investors. 

Mary L. Schapiro 

Chairman 

June 7, 2010 
Strategic Plan for Fiscal Years 2010–2015 v

Table of Contents

Mission, Vision, and Values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Strategic Goals and Outcomes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Environmental Perspective and Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . 3

SEC Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Strategic Goal 1: Foster and enforce compliance with the federal securities laws . . . . 8

Strategic Goal 2: Establish an effective regulatory environment . . . . . . . . . . . . . 20

Strategic Goal 3: Facilitate access to the information investors need to make 

informed investment decisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Strategic Goal 4: Enhance the Commission’s performance through effective 

alignment and management of human, information, and financial capital . . . . . . . . 39

Program Evaluation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

For further information on selected terms and topics, please see “Fast Answers” at 

http://www.sec.gov/answers.shtml.
Strategic Plan for Fiscal Years 2010–2015 1

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 market environment that is worthy of the public’s trust and 

characterized by transparency and integrity. 

Values

Integrity: As the SEC is the federal agency entrusted with regulating and conducting 

enforcement for the U.S. securities markets, each member of the agency’s workforce has a 

responsibility to demonstrate the highest ethical standards to inspire confidence and trust.

Accountability: The SEC embraces the responsibility with which it is charged. In carrying out 

its mission, SEC employees hold themselves accountable to the public and take responsibility 

for achieving SEC goals.

Effectiveness: The SEC strives to work creatively, proactively, and effectively in assessing and 

addressing risks to the securities markets, the public, and other market participants. The 

staff is committed to finding innovative and flexible approaches to the Commission’s work 

and using independent judgment to explore new ways to fulfill the SEC’s mission in the most 

efficient and effective manner possible.

Teamwork: The SEC recognizes that its success depends on a diverse, coordinated team 

committed to the highest standards of trust, hard work, cooperation, and communication. The 

staff is committed to working together and coordinating effectively with investors, business, 

governments, and other organizations in the U.S. and abroad.

Fairness: In exercising its regulatory and enforcement powers, the SEC treats investors, 

market participants, and others fairly and in accordance with the law. As an employer, the 

SEC seeks to hire and retain a skilled and diverse workforce, and to ensure that all decisions 

affecting employees and applicants are fair and ethical. As professionals, the staff treats all 

with respect and dignity.

Commitment to Excellence: The SEC is committed to the highest standards of excellence in 

pursuit of the agency’s mission. The investing public and the U.S. securities markets deserve 

nothing less.
2 U.S. Securities and Exchange Commission

Strategic Goals and Outcomes

Strategic Goal 1: Foster and enforce compliance with the federal securities laws

Outcome 1.1: The SEC fosters compliance with the federal securities laws.

Outcome 1.2: The SEC promptly detects violations of the federal securities laws.

Outcome 1.3: The SEC prosecutes violations of federal securities laws and holds 

violators accountable.

Strategic Goal 2: Establish an effective regulatory environment

Outcome 2.1: 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.

Outcome 2.2: The U.S. capital markets operate in a fair, efficient, transparent, and 

competitive manner, fostering capital formation and useful innovation.

Outcome 2.3: The SEC adopts and administers rules and regulations that enable 

market participants to understand clearly their obligations under the securities laws.

Strategic Goal 3: Facilitate access to the information investors need to make 

informed investment decisions

Outcome 3.1: Investors have access to high-quality disclosure materials that are useful 

to investment decision making.

Outcome 3.2: Agency rulemaking and investor education programs are informed by an 

understanding of the wide range of investor needs.

Strategic Goal 4: Enhance the Commission’s performance through effective alignment 

and management of human, information, and financial capital

Outcome 4.1: The SEC maintains a work environment that attracts, engages, and 

retains a technically proficient and diverse workforce that can excel and meet the 

dynamic challenges of market oversight. 

Outcome 4.2: The SEC retains a diverse team of world-class leaders who provide 

motivation and strategic direction to the SEC workforce. 

Outcome 4.3: Information within and available to the SEC becomes a Commissionwide shared resource, appropriately protected, that enables a collaborative and 

knowledge-based working environment.

Outcome 4.4: Resource decisions and operations reflect sound financial and risk 

management principles.
Strategic Plan for Fiscal Years 2010–2015 3

Environmental Perspective & Outlook

The SEC’s goals and priorities are influenced by a number of external environmental factors, 

including the demands of fulfilling its mission in complex and global financial markets and 

the legislative construct within which we work. During the past two years, this environment 

has changed dramatically, and it is almost certain that further significant changes are on the 

horizon. While this Strategic Plan attempts to anticipate various ways in which our markets, 

regulated industries and legislative underpinnings may transform over time, no plan can 

anticipate all possible scenarios. The following discussion outlines the agency’s perspective 

and outlook on the most significant environmental factors that have influenced—and are 

expected to continue to influence—the SEC’s fulfillment of its mission.

The Global Financial Markets

During the past several years, the financial markets have become increasingly complex and 

global in nature. Throughout the world, industries, products, and practices have continuously 

evolved in these markets, and capital has flowed across international borders.

The global financial markets are in the midst of significant challenges, however. The 

subprime mortgage crisis exposed weaknesses in financial industry regulation and the global 

financial system. The abrupt end to a broad credit boom—which included widespread declines 

in underwriting standards, breakdowns in lending oversight, overly generous credit ratings, 

and increased reliance on complex and opaque credit instruments—had pervasive financial 

and economic ramifications. Businesses, both large and small, failed because of the absence 

of a viable credit market. Several major financial institutions collapsed, were acquired under 

duress, or became subject to government control. A money market fund that “broke the buck” 

led to a “run” on certain money market funds. 

As investors sought the most stable markets, credit spreads reached historic highs and 

many fixed-income and short-term loan markets essentially ceased to function. Stock prices 

in every major country plummeted, and in October 2008, the Dow Jones Industrial Average 

suffered its worst weekly loss in its 112-year history. By March 2009, the Dow had dropped 

more than 50 percent from its mid-2008 peak. Between June 2007 and November 2008, 

Americans lost more than a quarter of their net worth. By early November 2008, the value of 

retirement, savings, and investment assets suffered dramatic losses, and housing prices had 

dropped 20 percent from their 2006 peak. 

During the past two years, national governments and international organizations 

have taken significant steps both to stem further economic deterioration and to prevent a 

recurrence of the factors that helped cause it. The SEC, as an independent and integrated 

capital markets regulator, has and will continue to play a vital role in these efforts and will 

coordinate with other regulators and enforcement authorities to that end. As we do so, the 

financial crisis and the complex and global nature of the markets will present continuing 

challenges. 

Financial products and practices are always evolving in the U.S. and global capital 

markets. This was true before the current crisis, and will be equally true for the foreseeable 

future. While (as described below) reform efforts may address current regulatory gaps, 

complexity in the capital markets is here to stay. Moreover, it is impossible to predict with 

certainty how the markets will evolve and what new issues will arise. We do know that the 

search for higher or more stable returns will foster the development of new products and 

different practices. Today’s market environment always resists stasis.
4 U.S. Securities and Exchange Commission

Evolving Regulatory Reform

In June 2009, the U.S. Department of the Treasury published key objectives for reform of the 

financial regulatory system. (Financial Regulatory Reform: A New Foundation) These reforms 

focus on:

■■ Strengthening regulation over financial institutions, particularly those that may pose 

unregulated risk to the country’s financial system, including requiring advisers to hedge 

funds and other private pools of capital to register with the SEC.

■■ Establishing more comprehensive supervision of the financial markets, including new 

requirements for market transparency, robust regulation of over-the-counter derivatives, 

stronger regulation of credit rating agencies, and a requirement that issuers and 

originators retain a financial interest in securitized loans.

■■ Protecting consumers of and investors in financial products from abuse, including 

by expanding SEC authority over mutual fund disclosure, aligning the duties of 

intermediaries across financial products, and paying whistleblowers for information 

that leads to enforcement actions resulting in significant financial sanctions.

■■ Providing the government with better tools for dealing with future financial crises.

■■ Raising international regulatory standards and cooperation, including working 

toward improvement of accounting standards in the wake of the credit crisis and the 

development of a single set of high quality global accounting standards.

Since that time, the Treasury has proposed several legislative initiatives aimed at 

furthering the objectives. Members of Congress, the President’s Working Group on Financial 

Markets, and others have debated and will continue to debate these recommendations 

during the coming months, and final approaches may significantly differ from those 

recommended. Notwithstanding some uncertainty as to the precise outline of the future 

legislative landscape, the SEC is using the lessons learned from the financial crisis to make 

improvements in areas already within its purview—that is, the agency’s own operations as 

well as its regulations. These improvements include the following:

■■ Safeguarding investors through proposed rules related to custody of assets held by 

investment advisers;

■■ Enhancing risk-based examinations of financial firms;

■■ Improving fraud detection techniques and enhancing targeted training;

■■ Developing and integrating further risk assessment tools and techniques across the 

agency;

■■ Revamping the handling of complaints and tips;

■■ Recruiting additional staff with specialized industry expertise;

■■ Expanding the scope and reach of enforcement staff through streamlined procedures, a 

restructured organization, and creation of specialized units;

■■ Bolstering the regulatory regime for credit rating agencies;
Strategic Plan for Fiscal Years 2010–2015 5

■■ Strengthening the money market fund regulatory regime; and

■■ Exploring whether additional regulation is appropriate to address potentially abusive 

short selling.

Continuing Risks

Many of the initiatives outlined in this Strategic Plan are designed to address specific 

problems brought to light by the global financial crisis. Despite best efforts, however, it is 

impossible to predict and plan for all potential challenges. The degree of the agency’s success 

in achieving its goals and outcomes may depend upon factors such as those listed below.

■■ The goals and outcomes outlined in this Strategic Plan are dependent upon the SEC 

obtaining significantly enhanced resources, in terms of number of staff, the expertise 

that the agency is able to recruit and retain, and the information systems that we are 

able to effectively deploy.

■■ A prolonged delay in recovery of the global financial system—and the global economy 

supported by that system—could result in further stress on all market participants and 

potentially alter behavior in unanticipated ways.

■■ Legislative and regulatory changes may not be successful in providing regulators with 

a comprehensive understanding of systemic risk or sufficient tools to manage that risk 

more effectively. 

■■ Reform of financial industry regulation may drive those whose activity is curtailed to 

other harmful actions or may unintentionally hamper behavior that would benefit the 

market and investors.

■■ Over-regulation or under-regulation may undermine the competitiveness of the U.S. 

capital markets in an increasingly competitive global marketplace.

■■ Over-regulation or under-regulation may chill innovation, entrepreneurship, and 

prudent risk taking.

■■ Regulations should not be perceived as a substitute for care and diligence on the part of 

investors in their own decision making.
6 U.S. Securities and Exchange Commission

SEC Resources

The SEC is an independent federal government agency funded through annual appropriations 

enacted by Congress and the President. These appropriations are offset by fees the agency 

collects on securities transactions, registrations, and merger/tenders. The SEC sets the rates 

for these fees in accordance with the Investor and Capital Markets Fee Relief Act, which 

reduced the overall amount of the SEC’s fee collections and established annual collections 

targets for registration fees and transaction fees during the FY 2002–2011 period. Since the 

passage of the Act in 2002, the SEC’s fee collections have exceeded the SEC’s funding levels, 

as shown in the chart below.

Figure 1. Comparison of SEC Fee Collections and SEC Funding Levels

0

500

1000

1500

2000

2002 2003 2004 2005 2006 2007 2008 2009 2010* 2011*

SEC Funding Levels SEC Fee Collections

Millions $

* For FY 2010 through FY 2011, the figures shown for projected fee collections are equal to the sum of the 

annual collections targets specified in the Investor and Capital Markets Fee Relief Act for registration fees and 

transaction fees.

The recent history of the SEC’s annual appropriations illustrates how the agency’s funding 

levels can vary over time. Between FY 2001 and FY 2005, Congress more than doubled the 

SEC’s funding level to increase significantly the agency’s workforce and technology program 

after the enactment of the Sarbanes-Oxley Act of 2002. Then, the SEC experienced flat or 

declining budgets between FY 2005 and FY 2007, resulting in a 10 percent reduction in 

its workforce and curtailing its investments in new or enhanced information technology 

systems. Although the FY 2008 and FY 2009 budgets enacted by Congress have permitted 

the agency to begin restoring these losses, as of FY 2009 the SEC is still operating below the 

levels of staff and new IT investments from earlier in the decade. Such variances in annual 

appropriations can present significant challenges for the agency as it seeks to craft and 

implement long-term strategies.

In addition, at the beginning of each fiscal year since 2000, the SEC has lacked a regular 

appropriation and therefore has had to operate under a continuing resolution, often for 

months at a time. (A continuing resolution is a stop-gap funding measure approved by 

Congress to maintain government operations, typically at the previous year’s funding levels, 

in the absence of a regular appropriation.) In all, the SEC has spent more than one-quarter of 
Strategic Plan for Fiscal Years 2010–2015 7

the time during the last ten fiscal years (between FY 2000 and FY 2009) under a continuing 

resolution. As a result, the SEC must restrain spending during the early months of each fiscal 

year to fit within the constraints of each continuing resolution. In addition, because of the 

delay in enactment of a regular appropriation, the SEC has less time during each fiscal year 

to implement the initiatives and activities funded under that regular appropriation. This 

compounds the challenges inherent in implementing long-term plans.

While during the last several years SEC budgets have not always been sufficient to 

maintain staffing levels and make important technology investments, the demands on SEC 

resources have continued to grow. For example, the number of tips and complaints received 

by the SEC’s enforcement program rose by 146 percent between FY 2003 and FY 2008, to 

over 600,000 per fiscal year. In addition, the investment adviser industry overseen by the 

SEC has grown by 47 percent in the number of registrants and approximately 60 percent in 

assets under management between FY 2003 and July 2009. In all, in 2009 the SEC’s 3,652 fulltime equivalents oversaw a total of more than 35,000 entities, including about 12,000 public 

companies, more than 11,000 investment advisers, about 8,000 mutual funds, and about 5,500 

broker-dealers, as well as national securities exchanges and self-regulatory organizations, 

transfer agents, the Municipal Securities Rulemaking Board, the Public Company Accounting 

Oversight Board (PCAOB), alternate trading systems, and credit rating agencies. 

Swiftly developing markets hold implications not only for the sheer range and volume of 

activity the SEC must undertake, but also the sophistication of the tools it needs to have at 

its disposal. As financial products and the relationships among market participants become 

increasingly complex, SEC employees must continually upgrade their skills and stay abreast 

of market developments. The SEC’s technology systems also must be able to handle a rapidly 

growing volume of information in emails, hard drives, and other media gathered during 

investigations and examinations; analyze the large amounts of financial data generated by 

securities market activity; and rival the increasingly sophisticated technologies of opposing 

counsel. 

For these reasons, the sufficiency of the SEC’s budgetary resources is a key factor that will 

affect the agency’s success over the next five years. The SEC will continue working to secure 

the resources necessary to fulfill its critical mission and achieve the goals and outcomes 

outlined in this Strategic Plan. This will include analysis of, and discussions with Congress 

and the Administration about, moving to a self-funding structure. A self-funding structure 

would provide the SEC a stable, long term funding source as well as the ability to plan 

strategically for several years, similar to the other federal financial regulators.
8 U.S. Securities and Exchange Commission

Strategic Goal 1:

Foster and enforce compliance with the federal securities laws

“Our securities markets demand a strong, vigorous, independent and fair regulator. 

The SEC must craft clear and understandable regulations, actively promote a culture 

of compliance by all market participants, and enforce aggressively and impartially 

the laws and regulations on the books. In the end, the vitality of our securities 

markets depends on the success of these efforts.”

COMMISSIONER KATHLEEN L. CASEY

“To fulfill our mission, regulation must be more than the laws and rules on the 

books. I believe that laws and rules that are effectively implemented, and vigorously 

enforced, form the basis for a robust regulatory regime. I am committed to a strong 

SEC that exemplifies these principles.” 

COMMISSIONER LUIS A. AGUILAR

FOSTERING COMPLIANCE WITH FEDERAL SECURITIES LAWS is interwoven through all 

of the Commission’s programs and is central to fulfilling its mission of protecting investors; 

maintaining fair, orderly and efficient markets; and facilitating capital formation. Through 

disclosure reviews and examinations of broker-dealers, investment advisers, self-regulatory 

organizations (SROs) and other market participants, the SEC seeks both to detect violations 

of the securities laws and rules and to foster strong compliance and risk management 

practices within these firms and organizations. When violations do occur, the SEC investigates 

and brings enforcement actions against regulated persons and entities, as well as other 

market participants. These actions span the broad spectrum of securities laws, including, 

among others, matters of financial disclosure, securities offerings, insider trading, and market 

manipulation. The SEC strives to take prompt action to stop the misconduct, penalize the 

wrongdoers, and, where possible, return funds to harmed investors. These critical investor 

protection functions contribute to investors’ confidence in our capital markets. 

As described further below, the SEC is instituting extensive reforms of its programs 

to foster and enforce compliance with the federal securities laws, to address issues raised 

by the agency’s failure to detect the Ponzi scheme operated by Bernard Madoff. These 

reforms include vastly expanding the SEC’s training programs, hiring staff with new skill 

sets, streamlining management, putting seasoned investigators on the front lines, revising 

enforcement and examination procedures, restructuring processes to ensure better sharing 

of information, leveraging the knowledge of third parties, revamping the way the SEC 

handles the hundreds of thousands of tips the agency receives annually, and improving riskassessment techniques so that examiners are knocking on the right doors and delving into the 

right issues. There is much to be done in this area and it will require long-term commitment 
Strategic Plan for Fiscal Years 2010–2015 9

and creativity. The acquisition of specialized skill sets and needed technology will require the 

SEC and Congress to work together to make these priorities a reality.

Outcome 1.1: The SEC fosters compliance with the federal securities laws.

While detecting violations of the federal securities laws is an integral aspect of the 

Commission’s programs (see Outcome 1.2, below), working to prevent future violations 

can be even more important to protecting investors and enhancing market integrity. The 

Commission’s goal is to encourage regulated entities and reporting companies to do all that 

they reasonably can to identify possible compliance pitfalls and take preventative action 

before a violation occurs. 

Initiatives designed to foster greater compliance with securities laws run throughout this 

Strategic Plan. They include efforts designed to provide investors with information they need 

so that they can wisely select and monitor their investments and professional intermediaries 

(see Outcome 3.1); to ensure that rules are written in an understandable way, so that those 

changed with compliance clearly understand their responsibilities (see Outcome 2.3); to 

create, as appropriate, prophylactic rules that prevent abusive trading or marketing practices 

(see Outcome 2.2); and to enhance incentives for regulated entities and reporting companies 

to self-correct (see Outcome 1.2).

Organizations vary significantly in terms of resources committed to compliance, in their 

level of sophistication, and in their ability to keep abreast of changes in the industry and in 

the regulatory environment. The SEC seeks to encourage within organizations of all sizes 

a strong “culture of compliance”—an environment, from top leadership down, that fosters 

ethical behavior and decision making. Simply put, this means instilling in every employee an 

obligation to do what is right. This philosophy should underpin all that the firm does, so that 

when employees make decisions, large and small, they are guided by a culture that reinforces 

acting in both a legal and ethical manner. 

The SEC supports and encourages strong compliance efforts among publicly traded 

companies, investment companies, investment advisers, broker-dealers, issuers, and auditors. 

The SEC also seeks to promote general compliance with the securities laws by everyone who 

participates in our capital markets. 

Initiatives:

To accomplish this outcome, the SEC plans to implement the following initiatives: 

■■ Promote investor awareness: The SEC will issue investor alerts and other education 

initiatives designed to both arm investors to be their own first line of defense 

against fraud and other violations, and to assist them in understanding the role of 

intermediaries and new products. With this knowledge, investors will be better equipped 

to identify market participants with strong compliance programs, which should limit 

opportunities for investor abuse. 

■■ Expand outreach efforts for promoting compliance practices: The SEC will enhance 

efforts to promote compliance by more proactive communications with registrants 

and their personnel, including chief compliance officers. These efforts will include 

expanding participation in CCOutreach; disseminating more expansive and targeted 

materials to firms by means of Compliance Alerts; detailing areas where examiners have 

identified significant compliance deficiencies, best practices identified by examiners or 

industry groups, and rule changes; and raising registrant awareness of the seriousness of 

certain exam findings by holding post-examination compliance conferences. 
10 U.S. Securities and Exchange Commission

■■ Increase deterrence through enhanced communication strategies: To deter future 

violations of the federal securities laws, the SEC will improve the quality, quantity, 

and means of communicating important information resulting from high impact 

Commission action. Such information might include major legal or other emerging 

issues arising in enforcement cases, matters of significance due to the size or 

magnitude of a fraud or the number of individuals affected by the Commission action, 

opportunities to improve corporate disclosure or accounting practices, or information 

relating to the adequacy or inadequacy of compliance efforts or remedial actions 

undertaken by persons involved in such cases.  

Performance Metrics:

The SEC intends to use the following performance measures to gauge its progress in 

achieving this outcome:

Performance Metric Description

Number of new investor 

education materials designed 

specifically to help investors 

protect themselves from 

fraud

Target: To Be Determined *

Through its Office of Investor Education and Advocacy 

(“OIEA”), and often in conjunction with other organizations, 

the agency issues Investor Alerts and other forms of 

educational material that inform investors about new or 

different permutations of fraud.

Number of industry outreach 

and education programs 

targeted to areas identified as 

raising particular compliance 

risks

Target: To Be Determined *

Targeted communication with industry participants on topics 

shaping the examination program is intended to enhance 

compliance practices and prevent violations before they 

occur. This measure identifies the number of major outreach 

efforts conducted including the agency’s national and regional 

CCOutreach events, published Compliance Alerts, and other 

educational initiatives.

Percentage of firms receiving 

deficiency letters that take 

corrective action in response 

to all exam findings

Target: 95%

At the conclusion of examinations, the staff communicates 

identified deficiencies to registrants in the form of a deficiency 

letter. Registrants are then given a chance to respond to staff 

findings and often take action to remedy any problems and 

potential risks. Most often, registrants respond that they 

have corrected the deficiencies and implemented measures to 

prevent recurrence. 

Percentage of attendees 

at CCOutreach that rated 

the program as “Useful” or 

“Extremely Useful” in their 

compliance efforts 

Target: 92%

The CCOutreach program is designed to educate, inform, and 

alert CCOs of pertinent information, including about effective 

compliance controls, that may assist them in administering 

compliance programs within registered firms. Improving 

compliance programs will reduce violative activity, resulting 

in increased protection for investors. At the conclusion of all 

CCOutreach events, CCOs are given the opportunity to rate 

the usefulness of the information provided in assisting them 

in their compliance efforts. 

* This performance metric is new for the SEC. The agency plans to begin collecting this information and 

determine the current, baseline level for this metric before establishing a target.
Strategic Plan for Fiscal Years 2010–2015 11

Related Indicators

The following indicators are useful for understanding the SEC’s activities in this area, but 

should not be considered performance measures and do not include targets that the agency 

will strive to reach in future years. The agency chose not to include targets because it would 

be inappropriate to conduct these activities with any eye towards hitting predetermined 

numerical targets rather than evaluating the facts as presented.

Indicator Description

Percentage of actions 

identified as “high impact” 

which have resulted in 

significant corrective 

industry reaction 

The Commission is striving to enhance communication 

resulting from high impact action, as discussed above. This 

indicator will examine how market participants, whose 

behavior is intended to most be influenced by the enhanced 

communication, react to action. For example, are the issues 

raised by the Commission action discussed in prominent 

private sector educational forums or literature?

Annual increases or 

decreases in the number of 

CCOs attending CCOutreach 

programs

While the raw number of CCOs in the industry may vary 

depending on factors outside of the SEC’s control, the 

Commission seeks to provide educational programs that are 

highly valued by attendees and their employers. Analyzing 

changes in participation levels will foster continued 

improvement in both program content and outreach efforts.

Outcome 1.2: The SEC promptly detects violations of the federal securities laws.

Violations of the securities laws have tremendous impact on investors. Accordingly, prompt 

detection of potential securities law violations is important in limiting the harm caused to 

investors. By identifying violations early, the SEC seeks to punish wrongdoers promptly, 

correct violative behavior in the financial markets before it proliferates, stop fraud and 

manipulation before it affects a large number of investors, and locate and preserve investors’ 

assets before they are squandered or dissipated. 

Detecting violations of the federal securities laws is a difficult but critical function, and 

one in which the agency continuously seeks to improve its efforts. In the midst of constantly 

evolving financial markets, the SEC seeks to strengthen its oversight of the large number 

of registrants by focusing its resources on the areas most at risk for fraud or other serious 

violations that could harm investors. This risk-based approach, which the agency continually 

seeks to refine, is implemented across agency programs through various methodologies aimed 

at identifying, assessing and managing risks to investors. 

In addition, each year the SEC receives hundreds of thousands of tips and complaints, as 

well as referrals from SROs, that staff analyze to determine matters requiring investigation. 

The agency works closely with others—SROs, the Department of Justice and other criminal 

authorities, and state, federal, and foreign regulators—to maximize the breadth and depth of 

our combined efforts. The SEC has substantial initiatives underway to improve these agency 

functions, which will greatly enhance the agency’s detection efforts. 
12 U.S. Securities and Exchange Commission

Initiatives:

To accomplish this outcome, the SEC plans to implement the following initiatives: 

■■ Improve management of tips and complaints: The SEC will centralize the process for 

receiving, processing, and acting upon tips, complaints and referrals so they can be 

handled consistently and appropriately, including through examinations or enforcement 

investigations. This effort will also enhance the SEC’s data on tips, complaints, 

and referrals, to help the agency spot trends and patterns about potential issues or 

violations that deserve further Commission action. 

■■ Enhance effectiveness of examination process: The SEC will conduct a top-to-bottom 

review of the effectiveness of its examination process, in response to systemic failures 

identified by the SEC’s Office of Inspector General. This review will focus not only 

on enhanced training, examination planning, recognition of and follow up regarding 

red flags, complaint evaluation, and third party verification procedures, but also the 

structural issues that have impaired communication both among examination staff and 

across divisions.

■■ Establish a whistleblower program: The SEC will encourage individuals and entities 

to identify potential parties to violations. The agency also will seek legislation from 

Congress to compensate whistleblowers who send the SEC productive tips, as is 

currently the case only with insider trading matters.

■■ Improve surveillance capabilities: The SEC will enhance the methods and tools for more 

effectively identifying and assessing risks in the markets and focusing surveillance 

efforts on entities, persons, and practices that pose high risk to investors and financial 

markets. As part of this effort, the SEC will seek to obtain greater access to data and 

insights from a variety of sources including data from registrants, SROs, commercial 

vendors, and other sources. In addition, the agency will expand the use of analytics to 

enhance the ability of examination and enforcement staff to detect potentially violative 

activity.

■■ Make more effective use of data analysis: The SEC will develop or obtain technology 

solutions to enhance the ability to easily access, search and analyze agency information 

on registrants and related entities, in order to help staff more effectively prepare for and 

conduct examinations.

■■ Bolster the expertise of SEC staff: The SEC will develop and implement specialized 

teams focusing on particular market issues that directly affect investors and the 

functioning of the markets, enhance the expertise of SEC staff through targeted training 

in critical areas, and enable staff to obtain additional training resulting in certifications, 

such as “Certified Fraud Examiners” and “Chartered Financial Analysts.” 

■■ Implement New Cooperation Initiative: The staff will use a variety of new tools— 

including cooperation agreements, deferred prosecution agreements and nonprosecution agreements—to encourage individuals and companies to promptly report 

violations and provide assistance to the agency. 
Strategic Plan for Fiscal Years 2010–2015 13

Performance Metrics:

The SEC intends to use the following performance measures to gauge its progress in 

achieving this outcome:

Performance Metric Description

Percentage of cause and 

special exams (sweeps) 

conducted as a result of risk 

assessment process that 

includes multi-divisional 

input

Target: To Be Determined *

As SEC staff expands its use of risk-based methods and has 

more data available for risk analysis, staff anticipates that 

the percentage volume of exams driven by a more robust risk 

assessment process will increase.

Percentage of advisers 

deemed “high risk” examined 

during the year

Target: 33%

To conduct oversight of investment advisers, the staff 

conducts a risk-based program of examinations. Certain 

advisers are identified as high risk at the beginning of every 

fiscal year, and then inspections are planned on a cyclical 

basis. The staff’s goal is to inspect high risk advisers at least 

once every three years. Meeting this target will depend 

upon the SEC having sufficient resources to keep pace with 

growth in the industry and the need for examiners to check 

compliance with evolving regulatory requirements.

Percentage of investment 

advisers, investment 

companies, and brokerdealers examined during the 

year

Target: Investment Advisers: 

9%; Investment Companies: 

15%; Broker-Dealers (exams 

by SEC or SROs): 55%

This measure indicates the number of registrants examined 

by the SEC or a SRO as a percentage of the total number of 

registrants. This measure includes all types of examinations: 

routine examinations, cause inspections to follow up on tips 

and complaints, limited-scope special inspections to probe 

emerging risk areas, oversight examinations of broker-dealers 

to test compliance and the quality of examinations by the 

Financial Industry Regulatory Authority (FINRA). 

Percentage of non-sweep and 

non-cause exams that are 

concluded within 120 days

Target: 75%

The staff conducts examinations each year of investment 

advisers, investment company complexes, transfer agents, and 

broker-dealers. The staff strives to complete its examinations 

in the most efficient and effective manner. When possible, 

the staff attempts to conclude its examinations within 120 

days of the end of any field work completed. However, some 

examinations require significantly more time so that potential 

violations are fully reviewed. To ensure that time pressure 

does not impair quality, the target for this benchmark should 

not be set too high. 

* This performance metric is new for the SEC. The agency plans to begin collecting this information and 

determine the current, baseline level for this metric before establishing a target.
14 U.S. Securities and Exchange Commission

Related Indicators

The following indicators are useful for understanding the SEC’s activities, but should 

not be considered performance measures and do not include targets that the agency will 

strive to reach in future years. The agency chose not to include targets because it would 

be inappropriate for the agency to conduct these activities with an eye towards hitting 

predetermined numerical targets rather than evaluating the facts as presented.

Indicator Description

Percentage of exams that 

identify deficiencies, and the 

percentage that result in a 

“significant finding”

Examiners find a wide range of deficiencies during 

examinations. Some of the deficiencies are more technical 

in nature, such as failing to include all information that is 

required to be in a record. However, other deficiencies may 

cause harm to customers or clients of a firm, have a high 

potential to cause harm, or reflect recidivist misconduct. 

The latter deficiencies are among those categorized as 

“significant.” This measure identifies the percentage of exams 

by registrant category that identified deficiencies, and that 

resulted in significant deficiency findings. 

Number of tips that result 

in a “cause” exam or 

enforcement investigation

Analysis of a tip can result in an action plan being established 

to support the request for a cause exam or an enforcement 

action. This measure would identify the volume of SEC 

actions that result from tips collected through its outreach 

efforts.

Outcome 1.3: The SEC prosecutes violations of federal securities laws and holds 

violators accountable.

Investors are not truly protected unless those who prey on them are swiftly and appropriately 

sanctioned. In holding violators of the federal securities laws accountable for their actions, 

Commission staff seek to balance limited resources and leverage important cooperative 

relationships with other law enforcement agencies, regulators, SROs, and the PCAOB. At the 

same time, the enforcement staff strives to obtain swift and firm sanctions, while remaining 

fair and reasonable. The breadth of the enforcement program’s capabilities in this area 

derives, in part, from its close cooperation with the other agency divisions that perform 

regulatory functions and also have deep knowledge about the market and its participants.

To improve the quality and efficiency of its investigations, the SEC is committed to 

streamlining internal processes to eliminate unnecessary delays. In pursuing violations of the 

securities laws, the SEC regularly works closely with other regulators and law enforcement 

agencies, and the agency plans to develop those relationships further to strengthen the reach 

of our efforts to hold wrongdoers accountable. The enforcement program also has seen a 

dramatic increase in its coordination efforts with foreign authorities, including requests 

for assistance to and from foreign regulators under bilateral and multilateral informationsharing agreements; requests to trace proceeds of fraud to foreign countries; actions to obtain 

asset freezes; and close cooperation with foreign authorities in investigations relating to 

market abuse, investment advisers, offering and disclosure fraud, complex derivatives, the 

Foreign Corrupt Practices Act, and other areas. The SEC is committed to expanding these 

efforts further.
Strategic Plan for Fiscal Years 2010–2015 15

Initiatives:

To accomplish this outcome, the SEC plans to implement the following initiatives: 

■■ Implement internal reforms of the enforcement program: The SEC will continue 

to implement greater efficiencies in internal processes, including enhancing case 

management systems and strategic planning to improve the timeliness of investigations, 

better focus investigations and cases on programmatic priorities, and maximize agency 

resources for investigating and prosecuting wrongdoing.

■■ Maintain specialty groups within the enforcement program: The SEC will use 

specialized groups and task forces to move quickly and centralize expertise on the most 

critical issues emerging in the markets.

■■ Enhance timeliness of distributions to wronged investors: The SEC will improve 

timeliness and efficiency of its efforts to return money collected in enforcement actions 

to harmed investors.

■■ Collaborate with other authorities on enforcement matters: The SEC will strengthen the 

reach of its enforcement efforts by improving coordination and cooperation with other 

law enforcement agencies and regulators, both domestic and foreign, including referring 

matters that are more appropriately pursued by other agencies and SROs.

■■ Enhance communications among SEC divisions and offices: The SEC will improve 

communication and sharing of information between the enforcement program and other 

divisions and offices to bring to bear the collective expertise of the agency in a timely 

and efficient manner.

■■ Review approach for enforcement penalties: The SEC will assess and improve the 

agency’s penalties framework so that penalties have the appropriate punitive and 

deterrent effect. 

■■ Broaden the range of enforcement sanctions: The SEC will develop alternative 

approaches to sanctions to gain greater flexibility in bringing actions to a conclusion 

that benefits investors, including enhanced approaches to promoting greater 

cooperation from wrongdoers.
16 U.S. Securities and Exchange Commission

Performance Metrics:

The SEC intends to use the following performance measures to gauge its progress in 

achieving this outcome:

Performance Metric Description

Percentage of enforcement 

cases successfully resolved

Target: 90%

A case is considered “successfully resolved” if it results in a 

favorable outcome for the SEC, including through litigation, 

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

the SEC strives to successfully resolve as many cases as 

possible but, at the same time, aims to file large, difficult, or 

precedent-setting cases when appropriate, even if success is 

not assured. This measure does not include any cases in which 

the SEC awaits a final outcome. The measure is calculated 

on a per-defendant basis. Large cases may involve several 

defendants. 

Percentage of first 

enforcement cases filed 

within two years

Target: 65%

This measure identifies the percentage of first enforcement 

actions filed within two years of opening an investigation 

or inquiry. In conducting investigations, the enforcement 

program continually strives to balance the need for complete, 

effective, and fair investigations with the need to file 

enforcement actions in as timely a manner as possible.

Percentage of debts where 

either a payment has been 

made or a collection activity 

has been initiated within six 

months of the due date of the 

debt

Target: 92%

The SEC can seek a wide range of remedies for failure to 

comply with the securities laws. These remedies include civil 

monetary penalties and disgorgement.  When the remedies 

are imposed by the Commission or the federal district court, 

payments must be made by a certain date. This measure 

identifies the percentage of debts where debtors have made 

payments or the SEC has initiated a collection activity within 

180 days of the due date. Such collection activities include, 

among other things, demand letters, negotiation of payment 

plans, enforcing the payment of the debt through the courts, 

or other judicial remedies.
Strategic Plan for Fiscal Years 2010–2015 17

Performance Metric Description

Percentage of Fair Fund and 

disgorgement fund plans that 

distributed the final tranche 

of funds to injured investors 

within 24 months of the 

order appointing the fund 

administrator

Target: To Be Determined *

In addition to other types of relief, the Commission may seek 

orders requiring parties to disgorge any money obtained 

through wrongdoing. The Commission also is empowered 

to seek civil penalties for violations of the securities laws.  

Where appropriate, the Commission has sought to return 

disgorged funds to harmed investors and, as a result of the 

Fair Funds provision of the Sarbanes-Oxley Act, to combine 

amounts paid as penalties with disgorged funds to reduce 

losses to injured parties. After sufficient disgorgement 

and penalties have been collected to form a distribution 

fund, the Commission appoints, or, in civil actions, seeks 

the appointment of, a fund administrator to develop and 

subsequently implement an approved plan to distribute 

funds to injured investors. Using the claims-made process, 

the fund administrator identifies injured investors and 

determines amounts to be disbursed to eligible claimants.  

The distribution of funds to eligible claimants may be made 

in several tranches to return funds to investors more quickly, 

while efforts continue to locate any remaining investors 

through the claims-made process. This measure identifies 

the percentage of “claims-made” distribution plans that 

distributed the final tranche during the fiscal year and within 

24 months of the order appointing the fund administrator.  

This reflects Commission-wide efforts to develop, approve, 

and implement plans to return funds to investors quickly, 

regardless of the monetary amount in the fund. Any funds 

not returned to investors are sent to the U.S. Treasury; neither 

disgorgement nor penalties are used for the Commission’s 

own expenses. 

Percentage of Fair Fund and 

disgorgement fund plans 

approved by final order 

within the prior fiscal year 

which had a first tranche 

of funds distributed under 

those plans within 12 months 

of such approval date

Target: 60%

In its enforcement cases, the Commission may seek to 

return funds to harmed investors through disgorgement of 

ill-gotten gains or through the Fair Funds provision of the 

Sarbanes-Oxley Act. This provision permits the Commission 

to combine amounts paid as penalties with disgorged funds 

to reduce losses to injured parties. This measure identifies the 

percentage of distribution plans for which a first tranche was 

distributed to injured investors within 12 months of the plans’ 

approval date. This reflects the Commission’s efforts to return 

funds to investors quickly, regardless of the monetary amount 

in the fund. Any funds not returned to investors are sent to 

the U.S. Treasury; neither disgorgement nor penalties are used 

for the Commission’s own expenses.

* This performance metric is new for the SEC. The agency plans to begin collecting this information and 

determine the current, baseline level for this metric before establishing a target.
18 U.S. Securities and Exchange Commission

Related Indicators

The following indicators are useful for understanding the SEC’s activities, but should 

not be considered performance measures and do not include targets that the agency will 

strive to reach in future years. The agency chose not to include targets because it would 

be inappropriate for the agency to conduct these activities with an eye towards hitting 

predetermined numerical targets rather than evaluating the facts as presented.

Indicator Description

SEC investigations 

referred to SROs or other 

state, federal, and foreign 

authorities for enforcement

The SEC works closely with other regulators and authorities 

so that violators of federal securities laws are held 

accountable. In certain circumstances, a matter may be more 

appropriately handled by another entity or in another venue, 

and the agency will refer the investigation for further action. 

This measure identifies the number (or percentage of the 

agency’s total number) of investigations that are referred to 

others for action.

Percent of all enforcement 

cases deemed “high impact”

High impact cases can include those that are the first of their 

kind, those that achieve an appropriate deterrent effect, cases 

that affect selected communities, cases addressing areas that 

are of particular interest to market participants, or cases of 

significant public interest. 

Percent of cases that come 

from internally-generated 

referrals or prospects

Through enhanced risk assessment practices, the agency aims 

to improve its ability to identify internally-generated tips or 

prospects for cases. Internal prospects could include issues 

identified during the course of SEC examinations, analysis of 

data, disclosure reviews, or other activities. 

Criminal proceedings 

relating to SEC 

investigations 

In some instances, investigations may reveal that both civil 

and criminal violations have occurred, and the agency will 

refer matters to criminal authorities for action. This measure 

identifies the number of SEC investigations referred to 

criminal authorities and the number (or percentage) resulting 

in criminal proceedings. 

Disgorgement and Penalties 

Ordered and the Amounts 

Collected by the SEC

In addition to other types of relief, the SEC may seek 

orders requiring parties to disgorge any money obtained 

through wrongdoing. The SEC is also empowered to seek 

civil penalties for violations of the securities laws. Where 

appropriate, the SEC has sought to return disgorged funds to 

harmed investors. Funds not returned to investors are sent to 

the Treasury. This indicator lists disgorgement and penalties 

ordered as a result of SEC cases and the amounts collected by 

the SEC. This indicator could increase or decrease based on 

various factors.
Strategic Plan for Fiscal Years 2010–2015 19

Indicator Description

Requests from foreign 

authorities for SEC 

assistance and SEC requests 

for assistance from foreign 

authorities

Each year, the SEC makes hundreds of requests for 

enforcement assistance to foreign regulators, while 

responding to hundreds of such requests from other nations. 

To facilitate this type of assistance, and encourage other 

countries to enact laws necessary to allow regulators to 

cooperate with their foreign counterparts, the SEC has 

entered into the Multilateral Memorandum of Understanding, 

an information-sharing arrangement negotiated through 

the International Organization of Securities Commissions 

(IOSCO). 
20 U.S. Securities and Exchange Commission

Strategic Goal 2:

Establish an effective regulatory environment

“The SEC’s mission is to protect investors, maintain efficient markets and promote 

capital formation. In order to establish and maintain an effective regulatory 

environment in furtherance of this mission, we need to understand the markets we 

regulate, be consistent and transparent in the application of the laws we enforce, 

and be scrupulous in our consideration and analysis of proposed regulatory changes. 

A regulatory ethos that focuses on knowledge, fairness, and rigorous empiricism will 

ensure high quality regulation.”

COMMISSIONER KATHLEEN L. CASEY

“As the investor’s advocate, the responsibility of rulemaking at the SEC is a serious 

undertaking. The SEC is the only federal regulator whose mission is to protect 

investors. When investor confidence falters, it is our job to search for solutions that 

will help restore their confidence in the fairness and integrity of our markets.”

COMMISSIONER ELISSE B. WALTER

“The Commission’s 2010-2015 strategic plan will guide the agency in its important 

work protecting investors, maintaining well-functioning markets, and facilitating 

capital formation. When we promote each element of our tripartite mission, the 

Commission ensures that the full range of investor interests is advanced and that 

enterprises are able to raise capital efficiently. I look forward to working with the 

Commission staff and my fellow Commissioners as we execute this plan.”

COMMISSIONER TROY A. PAREDES
Strategic Plan for Fiscal Years 2010–2015 21

THE COMMISSION’S RESPONSIBILITY is to put the federal securities laws into action 

by establishing a regulatory environment in which the agency’s mission can be met and 

sustained. When existing laws impair this mission, the Commission also has a duty to advise 

Congress about necessary corrective measures. Most securities law and regulation flow from 

two central principles. First, all investors should have equal access to accurate, complete and 

timely information about the investments they buy, sell and hold. Second, investors should 

be able to rely upon self-regulatory organizations, broker-dealers, investment advisers, 

investment companies, and other market participants to conduct investors’ securities 

transactions efficiently and in the investors’ best interests. 

The Commission has broad authority to shape the regulatory framework for the 

securities industry. Rulemaking often is required to remedy abusive practices or to respond 

to Congressional mandates, changing economic conditions, advances in technology, or novel 

products or services. In general, rulemaking and policies are designed to improve disclosure, 

facilitate the flow of important information to investors and the public, improve governance, 

promote high-quality accounting standards, enhance the accountability of financial 

intermediaries and other market participants, and strengthen the structure of the trading 

markets, among other goals. When properly crafted, these rules serve to further the agency’s 

mission. 

In addition to promulgating its rules and regulations, the SEC provides guidance when, 

among other things, it sets forth the views of the Commission or its staff on questions of 

current concern, without stating them in the form of legal requirements. The principal form 

of this guidance is publicly available staff statements on a particular legal or accounting 

issue or on an interpretation of a rule or regulation. The staff also responds to inquiries from 

individuals and companies about whether an activity undertaken in a specified manner would 

violate the securities laws. The inquiries can take the form of written requests that the staff 

not recommend enforcement or other action to the Commission if the activity is completed as 

specified. The Commission also issues individual orders granting relief from provisions of the 

securities laws when the specific facts indicate that doing so is consistent with the protection 

of investors and the policy and purposes behind the laws. These orders can serve as a testing 

ground for useful innovation and may pave the way for rulemaking.

The Commission believes that its rules and regulations should be drafted to enable 

market participants to understand clearly their obligations under the federal securities laws 

and to conduct their activities in compliance with law. Just as the securities laws require 

that disclosures be clear and precise, the Commission aims to promulgate rules that are 

clearly written, easily understood, and tailored toward specific ends. In addition, the agency 

recognizes that regular reviews of Commission regulations and its rulemaking processes are 

necessary to confirm that intended results are being achieved. 

Outcome 2.1: The SEC establishes and maintains a regulatory environment that 

promotes high-quality disclosure, financial reporting, and governance, and prevents 

abusive practices by registrants, financial intermediaries, and other market 

participants. 

The investments of nearly every American family are dependent upon the maintenance of 

healthy capital markets. The greater availability of and access to investment opportunities 

can help Americans build their portfolios to create a better life for themselves and their 

children. Investment opportunities may include attendant hazards, however, such as the 

potential for abuse by market intermediaries and other participants. Such abuses erode 

the investing public’s trust and undermine investor confidence in markets as a whole. To 
22 U.S. Securities and Exchange Commission

protect investors and to promote confidence in the integrity and fairness of the markets, the 

Commission uses its regulatory authority to deter potentially abusive tactics. 

The federal securities laws entrust the Commission with authority to shape the regulatory 

framework so that investors are protected through the availability of high-quality disclosure 

about their investments. In addition, the agency develops regulations that promote and 

strengthen corporate and fund governance.

Initiatives:

To accomplish this outcome, the SEC plans to implement the following initiatives: 

■■ Improve the quality and usefulness of disclosure: The SEC will continue to evaluate 

and, where necessary, amend its requirements to improve the quality and usefulness of 

registrants’ disclosures to investors. Areas of focus will include disclosure about risk 

management, executive compensation decisions and practices, nomination of directors, 

board governance, and discussion and analysis of results of operations and financial 

condition.

■■ Analyze trends in new financial instruments and market innovations: The SEC will 

proactively seek out information from market experts both within and external to the 

SEC to help inform the regulatory process, look for new risks, and ensure rules take into 

account the latest market practices. When possible, the SEC will directly collect and 

analyze relevant market data to identify upcoming trends, patterns, or relationships 

among asset classes, instruments and market participants.

■■ Strengthen proxy infrastructure: The SEC will conduct a comprehensive review 

of the issues related to the mechanics of proxy voting and shareholder-company 

communications, including the role of proxy advisory firms.

■■ Modernize beneficial ownership reporting: The SEC will consider how to modernize 

its beneficial ownership reporting requirements to, among other things, address 

the disclosure obligations relating to the use of equity swaps and other derivative 

instruments. 

■■ Harmonize regulatory structures for investment advisers and broker-dealers: The SEC 

will continue reviewing how the different regulatory systems that apply to brokerdealers and investment advisers may be harmonized for the protection of investors.

■■ Promote high-quality accounting standards: The SEC will continue to promote the 

establishment of high-quality accounting standards by independent standard setters in 

order to meet the needs of investors. For example: 

■■ In overseeing the Financial Accounting Standards Board (FASB), the 

SEC will strengthen and support the FASB’s independence and maintain 

the focus of financial reporting on the needs of investors, consistent 

with the recommendations set forth by the SEC Advisory Committee on 

Improvements to Financial Reporting;

■■ The SEC will support FASB’s efforts to improve financial reporting, 

including recent standard-setting initiatives such as off-balance sheet 

accounting and accounting for financial instruments; and
Strategic Plan for Fiscal Years 2010–2015 23

■■ Due to the increasingly global nature of the capital markets, the agency 

will promote higher quality financial reporting worldwide through, among 

other things, support for a single set of high-quality global accounting 

standards, and promotion of the ongoing convergence initiatives between 

the FASB and the International Accounting Standards Board. 

■■ Foster high-quality audits through the oversight of the accounting profession: The SEC 

will continue to oversee the PCAOB and its regulation of the accounting profession 

through the PCAOB’s inspection and disciplinary programs. The SEC also will work 

closely with the PCAOB on the promulgation and interpretation of auditing standards 

to address current issues in the capital markets. 

■■ Continue global coordination and assistance: The SEC will continue to work closely 

with its regulatory counterparts abroad, as well as with relevant international 

organizations, to promote high-quality securities regulation worldwide and convergence 

where appropriate. In addition, the SEC will continue to provide technical assistance to 

emerging and recently-emerged markets to help these jurisdictions in establishing and 

implementing laws and regulations that minimize the likelihood of regulatory arbitrage 

and promote cross-border enforcement and supervisory assistance.

■■ Strengthen investment adviser and broker-dealer oversight: The Commission 

will continue to enhance its oversight of investment advisers and broker-dealers. 

For example, the Commission is considering rules designed to prevent political 

contributions from influencing the selection of investment advisers to the detriment of 

public pension plan clients, as well as rules that would provide additional safeguards 

to investors when an adviser has custody of client assets. The Commission will also 

consider requiring those who provide investment advice to provide clients and 

prospective clients with clear, current, and more meaningful disclosure of their business 

practices, conflicts of interest, and backgrounds. 

■■ Address investment company distribution fees: Given the evolution in the investment 

management industry and in the uses of investment company distribution fees, the SEC 

plans to reconsider the rule permitting these fees and the factors that fund boards must 

consider when approving or renewing them.

■■ Enhance disclosures related to asset-backed securities: The SEC is considering revising 

its rules and forms to improve registration and disclosure requirements for asset-backed 

securities.
24 U.S. Securities and Exchange Commission

Performance Metrics:

The SEC intends to use the following performance measures to gauge its progress in 

achieving this outcome:

Performance Metric Description

Survey on quality of 

disclosure

Target: To Be Determined *

Under this metric, the SEC plans to conduct a survey to elicit 

feedback on the quality of disclosures and the Commission’s 

disclosure requirements. The SEC would track whether the 

percentage of respondents answering positively improves 

from year to year.

Number of consultations; 

joint events, reports, or 

initiatives; and joint 

examinations and other 

mutual supervisory efforts 

with SROs and other 

federal, state, and non-U.S. 

regulators

Target: To Be Determined *

This metric gauges how much the SEC is coordinating with 

other financial regulatory agencies within a given fiscal 

year. Also, as securities markets around the world become 

increasingly integrated and globalized, it is essential that 

the SEC work frequently and effectively with its partner 

regulators both in the U.S. and abroad. 

Number of non-U.S. 

regulators trained

Target: 1,750 per year

This metric shows the reach of the SEC’s technical assistance 

programs for regulators around the world. The SEC conducts 

these training sessions to assist countries in developing and 

maintaining robust protections for investors and promote 

cross-border enforcement and supervisory assistance. 

* These performance metrics are new for the SEC, and the agency must further refine the statistics before 

establishing targets.

Related Indicator

The following indicator is useful for understanding the SEC’s activities, but should not be 

considered a performance measure and does not include a target that the agency will strive to 

reach in future years. 

Indicator Description

Average cost of capital in 

U.S. relative to the rest of the 

world

Countries’ cost of capital can vary according to their 

protections for investors, the strength of their disclosure 

regimes, and the presence of fair, orderly, and efficient 

markets, among other factors. Therefore, although this metric 

is affected by other economic factors, it can provide some 

indication of the quality of securities regulation in a given 

country.
Strategic Plan for Fiscal Years 2010–2015 25

Outcome 2.2: The U.S. capital markets operate in a fair, efficient, transparent, and 

competitive manner, fostering capital formation and useful innovation. 

Through rulemaking and other initiatives, the Commission works to assure that investors 

have fair access to securities markets; that their orders are handled in an efficient and 

transparent manner throughout the order entry, execution and settlement process; that 

securities laws and regulations do not promote regulatory arbitrage; and that U.S. securities 

markets remain vibrant, competitive and resilient. These efforts help to promote markets 

in which investors have the necessary information to make investment decisions, the price 

discovery process is fair and free from manipulation, and trades can be executed efficiently. 

Also, the Commission fosters capital formation by facilitating market access for novel 

products and innovative and competitive investment company structures when consistent 

with investor protection. 

Self-regulation is a fundamental component of the regulation of U.S. securities markets 

and market intermediaries. The Commission’s oversight of SROs serves to provide further 

assurance that our securities markets operate in a fair, efficient, and orderly manner; that 

they are competitive; and that they promote capital formation. The Commission has authority 

over the rulemaking and other activities of self-regulatory organizations, which include 

national securities exchanges, FINRA, and clearing agencies. In approving SRO rules, the 

Commission must determine, among other things, that these rules are designed to prevent 

fraudulent and manipulative practices, promote just and equitable principles of trade, and 

foster cooperation in the clearing and settling of trades, and that they do not create an 

unnecessary or inappropriate burden on competition. 

Initiatives:

To accomplish this outcome, the SEC plans to implement the following initiatives: 

■■ Foster a strong market structure: The SEC will continue to pursue initiatives that 

promote the goals of the national market system in the trading of securities, such as 

enhancing price transparency, facilitating best execution, assuring fair access to trading 

systems, and fostering fair competition. These may include:

■■ Strengthening the incentives for investors to display trading interest, and 

thereby contribute to the public price discovery process;

■■ Enhancing the post-trade transparency of alternative trading systems 

(including dark pools) in order to address market fragmentation and 

facilitate best execution;

■■ Reviewing the impact of algorithmic and other automated trading on the 

markets, including its contribution to market volatility and, if warranted, 

developing an appropriate policy response; 

■■ Articulating core structural standards for registered exchanges, 

particularly in light of the development of affiliated exchange groups;

■■ Considering rulemaking with respect to the options markets to promote 

continued fair, efficient, and non-discriminatory access to exchanges’ 

quotations, to provide for uniform disclosure of execution quality 

statistics, and to address the extent to which quoting options in penny 

increments is appropriate;
26 U.S. Securities and Exchange Commission

■■ Updating Commission rules and regulations, such as Regulation ATS and 

Regulation NMS, to reflect market structure developments. 

■■ Strengthen the viability of self-regulation: The SEC will take steps to promote the 

continued vigor of self-regulation, particularly in light of the potential conflicts of 

interest that have arisen as the securities exchanges have demutualized and become 

operators of highly-competitive, for-profit shareholder-owned businesses. 

■■ Enhance oversight of derivatives: The SEC will consider ways to use its existing 

authority to improve the transparency and integrity of the over-the-counter (OTC) 

derivatives market, including the market for credit default swaps. The SEC also will 

work with other government agencies to seek changes to laws to fill regulatory gaps 

in the oversight of OTC derivatives. The SEC will work with the CFTC to seek to 

harmonize futures and securities laws for economically equivalent instruments. 

■■ Prevent market manipulation: As part of this initiative, the SEC will review recent 

changes to the regulation of short sales to assess their effectiveness and determine 

whether additional modifications are warranted. The agency also intends to explore 

ways to enhance the transparency of trading activities to better deter and detect 

manipulation. In addition, the SEC will pursue initiatives to update and enhance the 

anti-manipulation rules that address the activities of underwriters, issuers, selling 

security holders and others in connection with securities offerings, as well as update 

and enhance the anti-manipulation rules that address issuer repurchases and timely 

public notice of dividends and other distributions.

■■ Improve transparency and oversight of small capitalization securities: The SEC 

will pursue initiatives focused on the special characteristics of the market for small 

capitalization securities, in order to enhance the transparency of this market and 

promote vigorous oversight. Goals of these initiatives will include assuring appropriate 

investor protections and promoting market efficiency. The SEC also will review its rule 

that governs the publication of quotations for securities that are not listed on a national 

securities exchange, to more narrowly focus that rule on those securities and situations 

most likely to raise concerns about fraud and manipulation.

■■ Implement money market fund reforms: The SEC plans to enhance the regulatory 

regime for money market mutual funds to better position them to meet demands from 

investors who want to redeem their shares on a short-term basis. 

■■ Streamline the process for introducing new exchange-traded funds: The Commission 

will consider whether to permit certain exchange-traded funds to be introduced to 

the market without first submitting an application and receiving an order from the 

Commission.  

■■ Strengthen oversight of credit rating agencies: The SEC will continue to enhance 

the program for registration and oversight of credit rating agencies that operate as 

nationally recognized statistical rating organizations, with a particular emphasis 

on measures designed to increase the transparency of ratings methodologies and 

performance and to address conflicts of interest inherent in the credit rating industry.

■■ Improve clearance and settlement: The SEC will continue to pursue initiatives to 

enhance the clearance and settlement of securities transactions by implementing 

“straight through processing,” the automation of the trade process from execution 

to settlement without manual intervention or the reentry of data. The SEC also will 
Strategic Plan for Fiscal Years 2010–2015 27

consider whether to modify existing transfer agent rules in an effort to modernize 

the manner in which transfer agents provide transfer and other services in the U.S. 

clearance and settlement system. 

■■ Enhance market continuity of operations: The SEC is working with critical market 

participants to develop adequate plans and procedures so that back-up infrastructure 

and personnel are able to maintain continuity of operations through any future market 

disruption. 

■■ Coordinate closely with other agencies on regulatory issues: In order to create a 

more effective and coordinated regulatory environment, the SEC will partner with 

other federal, state, and non-U.S. regulatory agencies to share data, information and 

expertise on regulatory issues that cross jurisdictional boundaries, domestically and 

internationally.

Performance Metrics:

The SEC intends to use the following performance measures to gauge its progress in 

achieving this outcome:

Performance Metric Description

Percentage of transaction 

dollars settled on time each 

year

Target: At least 99% of all 

equity trades by dollar value

This metric measures the efficiency of the U.S. clearance and 

settlement system for equity securities. 

Average institutional 

transaction costs for 

exchange listed stocks on a 

monthly basis

Target: To Be Determined *

This performance metric captures the actual cost of trading in 

large (institutional size) transactions.

Percentage of market outages 

at SROs and electronic 

communications networks 

(ECNs) that are corrected 

within targeted timeframes

Target: 60% within 2 hours, 

75% within 4 hours, and 

96% within 24 hours 

Market outages reflect problems in the systems underlying 

the securities markets that could have an adverse affect on 

the markets’ ability to function as required. The SEC assesses 

the reliability and resiliency of these systems to minimize 

the number and duration of outages. This metric gauges how 

quickly outages are resolved, so that market activity can 

resume.

* This performance metric is new for the SEC, and the agency must further refine the statistics before 

establishing targets.
28 U.S. Securities and Exchange Commission

Related Indicators

The following indicators are useful for understanding the SEC’s activities, but should not be 

considered performance measures and do not include targets that the agency will strive to 

reach in future years. 

Indicator Description

Average quoted spread for 

exchange listed stocks on a 

monthly basis

This indicator gauges the hypothetical cost of trading in small 

amounts at the quoted markets, based solely on published 

quotations.

Average effective spread for 

exchange listed stocks on a 

monthly basis

This indicator captures the cost of trading in small amounts 

based on actual trade prices and the quotes at the times of 

those trades.

Speed of Execution This indicator gauges how quickly transactions are executed 

in the U.S. securities markets.

Average quoted size of 

exchange listed stocks on a 

monthly basis

This indicator measures the amount of liquidity visible to the 

market at the displayed quotes.

Average daily volatility of 

exchange listed stocks on a 

monthly basis

This statistic gauges short term price changes, which are an 

indicator of the risk of holding stock.

Outcome 2.3: The SEC adopts and administers rules and regulations that enable 

market participants to understand clearly their obligations under the securities laws.

The process of developing and administering rules and regulations is one of the primary 

functions of the SEC and involves staff from virtually every division and office. One of the 

agency’s primary objectives is to maintain a regulatory framework that enables market 

participants to understand clearly their obligations.

The success of this outcome requires coordination among staff who bring a variety of 

different perspectives, with appropriate tools and support. In addition, the agency must 

continually reevaluate its regulatory framework so that it provides sufficient protections to 

investors as new products or services enter the market.

Initiatives:

To accomplish this outcome, the SEC plans to implement the following initiatives: 

■■ Improve agency-wide coordination of the rulemaking process: The SEC will seek 

additional ways to break down internal organizational barriers and foster greater 

collaboration among divisions and offices on rulemaking initiatives. The agency will 

establish collaboration tools to more effectively gather and analyze data from across the 

SEC and manage rulemaking activities. 
Strategic Plan for Fiscal Years 2010–2015 29

■■ Enhance the economic support for Commission rules and regulations: The SEC will 

continue to enhance assistance of economists earlier and more often in the rulemaking 

process, so that the Commission’s rules and regulations continue to be appropriately 

informed by economic reasoning and robust cost-benefit analysis. This includes 

adopting a multi-disciplinary approach that combines economic analyses with relevant 

market data, detailed financial knowledge, and legal expertise.

■■ Assess the effect of prior Commission rulemakings: The SEC will periodically assess the 

impact of past rulemakings to gauge their effectiveness and determine whether more 

effective alternative approaches may have become available. Where appropriate, these 

determinations should employ empirical analysis. Pertinent divisions and offices will 

establish collaborative tools to more effectively conduct and coordinate such analyses.

■■ Improve the process for no action, interpretive, and exemptive regulatory requests: The 

SEC will continue reviewing its process for handling written requests for no-action, 

exemptive and interpretive relief, so that the agency’s responses are completed in a 

timely and efficient manner. 

■■ Streamline the process for reviewing SRO rule filings: Consistent with fulfilling its 

obligations under the Exchange Act with respect to the oversight of SRO rules, SEC will 

continue to explore further ways to streamline the SRO rule filing process. 

■■ Facilitate market access of financial products through exemptive rules: The SEC will 

aim to eliminate the need for investment advisers and investment companies to submit 

applications for exemptive relief that are substantially similar to certain previously 

granted applications by adopting rules codifying the relief. For example, the SEC may 

propose rules or amendments to rules that would codify exemptive relief the SEC has 

granted permitting funds of funds, employees’ securities companies and manager-ofmanager structures.
30 U.S. Securities and Exchange Commission

Performance Metrics:

The SEC intends to use the following performance measures to gauge its progress in 

achieving this outcome:

Performance Metric Description

Length of time to respond 

to written requests for noaction letters, exemptive 

applications, and written 

interpretive requests

Target: The Division of 

Trading and Markets’ goal 

is to complete 85% of all 

responses within 60 days. 

The Division of Investment 

Management’s goal is to 

provide initial comments on 

at least 75% of interpretive 

and no action requests 

within three weeks of 

receipt of the letter request, 

and initial comments on 

at least 80% of exemptive 

applications within 120 

days after receipt of an 

application. The Division 

of Corporation Finance’s 

targets are to complete 

90% of initial comments on 

no-action letters within 30 

days, and 100% of initial 

comments on shareholder 

proposals by a company’s 

planned proxy mailing date.

The SEC staff responds to requests for guidance from 

individuals and companies about specific provisions of the 

federal securities laws. These queries can ask for proper 

interpretations of the securities laws or regulations, or for 

assurances that no enforcement action will be taken in 

certain circumstances. 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 measure gauges whether the 

Divisions of Trading and Markets, Investment Management, 

and Corporation Finance are issuing initial comments on 

these requests on a timely basis.

Survey on whether SEC rules 

and regulations are clearly 

understandable

Target: To Be Determined *

The SEC aims to promote a regulatory environment 

in which market participants clearly understand their 

obligations. Through this metric, the SEC intends to survey 

market participants to determine whether they believe the 

Commission’s regulatory requirements are clear. 
Strategic Plan for Fiscal Years 2010–2015 31

Performance Metric Description

Time to complete SEC review 

of SRO rules that are subject 

to SEC approval

Target: 40% of filings 

completed by 35 days from 

date of publication and 

80% of filings completed 

by 45 days from date of 

publication

The SEC reviews SRO rule proposals for consistency with the 

Exchange Act and the investor protection, market operation 

and structure, and other rules. This metric gauges how quickly 

the SEC completes these reviews after a proposed rule change 

requiring Commission approval has been filed. 

* This performance metric is new for the SEC. The agency plans to begin collecting this information and 

determine the current, baseline level for this metric before establishing a target.

Related Indicator

The following indicator is useful for understanding the SEC’s activities, but should not be 

considered a performance measure and does not include a target that the agency will strive to 

reach in future years. 

Indicator Description

Percentage of SRO rule 

filings that are submitted for 

immediate effectiveness

This metric gauges the proportion of SRO rule proposals 

that can be submitted for immediate effectiveness, without 

Commission approval.
32 U.S. Securities and Exchange Commission

Strategic Goal 3:

Facilitate access to the information investors need to make informed 

investment decisions

“The SEC was created to restore investor confidence in our capital markets by 

providing investors and the markets with more reliable information and clear rules 

of honest dealing. SEC regulation aims to foster investor confidence with two 

common-sense notions. One, companies financed by the investing public must tell 

the public the truth about their businesses, the securities they are selling, and the 

risks involved in investment. Two, people who sell, trade, and provide advice about 

securities must treat investors fairly and honestly, putting investors’ interests first. 

The quality and credibility of disclosure documents filed with the SEC by public 

companies are at the heart of this approach.”

COMMISSIONER ELISSE B. WALTER

“Disclosure required by the SEC serves the needs of investors as well as the 

general public by increasing transparency and accountability. The information that 

is useful to the public, and that investors need in order to make prudent decisions, 

is dynamic. The SEC must keep pace with these changing needs by listening 

to investors and by anticipating the kinds of decisions that investors and the 

general public will face in the future. I am committed to working with my fellow 

Commissioners to advance the public interest.”

COMMISSIONER LUIS A. AGUILAR

“The federal securities laws are premised on a philosophy of disclosure. We have an 

obligation, therefore, to ensure that market participants are armed with the material 

information they need to make informed decisions. As our markets evolve, the 

regulatory regime needs to keep pace so that investors continue to have access to 

relevant information on a timely basis. This strategic plan will guide the Commission 

and its staff in meeting this challenge.”

COMMISSIONER TROY A. PAREDES
Strategic Plan for Fiscal Years 2010–2015 33

THE FEDERAL SECURITIES LAWS require that corporations, investment companies, and 

other entities provide investors with timely and meaningful information about, among other 

things, their operations and finances. Because an educated and informed investor ultimately 

provides the best defense against fraud and costly mistakes, these laws place great emphasis 

on providing the investing public with meaningful information. As part of its disclosure 

program, the SEC requires entities to disclose financial and non-financial information to 

the public, thereby providing a common pool of knowledge for all investors to use to judge 

for themselves if a security is a good investment. Similarly, SEC rules require that investors 

have access to certain information about the financial intermediaries that they rely upon 

for investment advice and other services. SEC staff review the filings that corporations, 

investment companies, and other entities submit to assess whether the disclosures appear 

adequate and accurate.

The goal of the SEC’s investor education program is to give investors the information they 

need to evaluate current and potential investments, while also providing agency staff with 

critical insight about emerging trends and factors shaping investor decision making. The SEC 

staff aims to collect investor-focused data from a variety of sources and use it both to track 

trends in the securities industry and to identify, among other things, problematic brokers, 

firms, and sales practices. This information can help shape the agency’s overall approach to 

risk assessment, focus internal resources, and shape the initiatives of other SEC offices and 

divisions. In addition, agency staff work collaboratively with other regulators and educational 

organizations to place information in the hands of the investing public to promote informed 

decisions, as well as to help investors avoid fraudulent schemes.

Outcome 3.1: Investors have access to high-quality disclosure materials that are 

useful to investment decision making. 

Investors who have access to information and know what questions to ask are more likely to 

invest wisely, and to choose professional intermediaries that will best meet their objectives. 

The SEC understands that not all investors need the same information and that those needs 

are affected by their backgrounds, resources and goals. The SEC seeks to structure disclosure 

requirements so that investors are armed with the timely and meaningful information they 

need to make appropriate investment decisions. 

As technology and the complexity of financial instruments change, so too do the needs of 

modern day investors. Providing investors with information in concise, easy-to-use formats 

that are tailored to their needs helps investors to help themselves. On a recurring basis, the 

agency examines its filing review program to explore whether its disclosure requirements, 

review criteria, approach to comments, and the professional and technology resources utilized 

provide maximum impact to benefit investors. As a result, new initiatives are generated and 

internal practices are revised that shape the future of the program. 

Initiatives:

To accomplish this outcome, the SEC plans to implement the following initiatives: 

■■ Revise disclosure and reporting requirements to reflect the informational needs of 

today’s investors: The SEC will undertake a number of initiatives to enhance disclosure 

requirements for the benefit of investors, including reassessing current core corporate 

disclosure requirements and implementing the new mutual fund summary prospectus 

regime. In proposing changes for the Commission to consider, the staff will seek to 

modernize disclosure requirements and eliminate redundant reporting requirements. 

The staff’s efforts will include a comprehensive review of proxy voting and shareholder 

communications to identify ideas and proposals for potential changes to rules. The SEC 
34 U.S. Securities and Exchange Commission

also will consider changes requiring broker-dealers that sell securities such as mutual 

funds, variable insurance products and 529 plan interests to disclose information 

relating to their compensation and conflicts of interest and key product features at the 

“point of sale” and on the Internet. 

■■ Evaluate filing review programs for the most effective disclosures to investors: Agency 

staff will evaluate the filing review programs to determine whether the SEC is properly 

using risk management tools to identify filings for review and seek enhancements in 

disclosure.  This assessment will explore the criteria the agency uses to identify filings 

for review, the SEC’s approach to issuing comments to companies, and new ways for 

technology to help improve the agency’s programs.

■■ Design and implement new disclosure regimes for specialized categories of issuers: The 

SEC also will consider revising the disclosure requirements for securitized financial 

products and other complex financial instruments and work with the Department of 

Labor to address issues with respect to target date funds. The SEC intends to consider 

enhancing the information that a broker-dealer underwriting a primary offering of 

municipal securities must determine that an issuer will provide to shareholders, as 

well as to improve protections against identity theft and investor understanding of 

financial privacy notices. The SEC also intends to consider amending the broker-dealer 

and investment adviser registration forms, to elicit information that will be useful to 

investors in comparing and selecting investment professionals. 

Performance Metrics:

The SEC intends to use the following performance measures to gauge its progress in 

achieving this outcome:

Performance Metric Description

Percentage of public 

companies and investment 

companies with disclosures 

reviewed each year 

Target: 33%

The Sarbanes-Oxley Act requires that the SEC review 

the disclosures of all companies and investment company 

portfolios reporting under the Exchange Act at least once 

every three years. These reviews help improve the information 

available to investors and may uncover possible violations of 

the securities laws.

Time to issue initial 

comments on Securities Act 

filings

Target: Average of less than 

30 days 

The target of 30 days or less has become a de facto industry 

standard for the maximum time to receive initial comments.  
Strategic Plan for Fiscal Years 2010–2015 35

Performance Metric Description

Percentage of investment 

company disclosure reviews 

for which initial comments 

are completed within 

timeliness goals 

Target: Initial registration 

statements 85%; Posteffective amendments 90%; 

Prelim. proxy statements 

99%

For initial registration statements, the SEC’s goal is to issue 

initial comments within 30 days after they are filed (60 days 

for registration statements of insurance product separate 

accounts and related mutual funds). The SEC also aims to 

comment on post-effective amendments within 45 days and 

preliminary proxy statements within 10 days after they are 

filed.

Point of Sale “click-through 

rate” 

Target: To Be Determined *

The point of sale initiative relies on a layered approach 

that combines point of sale disclosure and Internet-based 

disclosure. This measure would determine how often investors 

click on broker-dealers’ web sites to obtain information about 

broker-dealer compensation and related conflicts of interest. 

Access to broker-dealer 

and investment adviser 

background checks

Target: To Be Determined *

Greater availability of professional background information 

of broker-dealers and their employees through the 

BrokerCheck system will provide investors with the ability 

to make better-informed decisions. Investors also have the 

ability to check the backgrounds of investment advisory firms 

through the SEC’s Investment Adviser Public Disclosure 

(IAPD) system. This measure would gauge the demand 

for disclosure information about broker-dealers and their 

employees through the BrokerCheck website and about 

investment advisers through the IAPD.

Investor demand for 

disclosures on municipal 

securities

Target: To Be Determined *

Greater availability of market-sensitive information through 

the Municipal Securities Rulemaking Board’s Electronic 

Municipal Market Access (EMMA) website will provide 

investors with the ability to make better-informed investment 

decisions and assist market participants in fulfilling their 

disclosure obligations. This measure gauges the demand for 

disclosure information about municipal securities through the 

EMMA website. 

Satisfaction index for 

disclosure process 

Target: To Be Determined *

The agency will conduct survey research or focus groups to 

identify the level of satisfaction with disclosure requirements.

* These performance metrics are new for the SEC. The agency plans to begin collecting this information and 

determine the current, baseline level for these metrics before establishing targets.
36 U.S. Securities and Exchange Commission

Outcome 3.2: Agency rulemaking and investor education programs are informed by 

an understanding of the wide range of investor needs.

Understanding the interests and concerns of investors is critical to carrying out 

the Commission’s investor protection mission. The agency advances this mission by 

communicating daily with investors, responding to their complaints and inquiries and 

providing educational programs and materials.

Prospectively, the agency intends to obtain more comprehensive information about the 

views and perspectives of investors. It will seek more robust information regarding the 

behavioral characteristics of investors and the types of information investors need and 

use as they make investment decisions. It will compile and provide this information to the 

Commission to help it develop rules and educational programs that address investors’ views 

and concerns.

The agency is exploring ways to encourage investor input by presenting investors 

with clear, easily understandable explanations of Commission rule proposals and other 

Commission activities through a variety of communication channels, including new media. 

These efforts will complement those of the agency’s Investor Advisory Committee, which 

was constituted to present the views and experience of a broad spectrum of investors, and 

which will serve as an additional source of information concerning investors’ priorities and 

perspectives on the Commission’s regulatory agenda.

More comprehensive data about investors also will drive the Commission’s investor 

education efforts. Working in partnership with other federal and state agencies, financial 

industry associations, consumer groups and educational organizations, the agency will 

develop investor education initiatives that are targeted to specific audiences, yet share the 

common objective of helping investors to help themselves.

Initiatives:

To accomplish this outcome, the SEC plans to implement the following initiatives: 

■■ Inform rulemaking with research on investor behavior: The SEC will proactively seek 

information on how different types of investors make investment decisions, in order 

to inform the Commission’s rulemaking efforts and investor education programs and 

materials.

■■ Reshape how agency information is made available to investors: The SEC will 

encourage investor input in the Commission’s regulatory agenda by providing easily 

understandable explanations of the Commission’s activities, distributed through 

multiple communication channels including new media, and by responding in a timely 

fashion to investor contacts.

■■ Address Investor Advisory Committee input: The SEC will consider information 

and recommendations from the Investor Advisory Committee regarding investors’ 

perspectives and priorities.

■■ Modernize technology and service offerings targeted at assisting the investing public:

The SEC plans to use automated complaint tracking tools to identify emerging investor 

concerns and complaint trends to inform rulemaking efforts and the development of 

targeted educational materials. 

■■ Expand collaborative partnerships: The SEC will partner with other federal and 

state agencies, securities regulators and non-profit organizations to shape and target 

educational initiatives to maximize their impact on specific communities of interest.
Strategic Plan for Fiscal Years 2010–2015 37

Performance Metrics:

The SEC intends to use the following performance measures to gauge its progress in 

achieving this outcome:

Performance Metric Description

Number of investors reached, 

and number of in-person 

events with specifically 

targeted communities and 

organizations

Target: To Be Determined *

The agency has developed an extensive collection of free 

information to help investors understand the basics of 

investing; the risks and rewards of various products and 

strategies; the importance of diversification; and ways to 

find information about brokers, advisers, and companies. 

Much of this information is posted on the SEC’s Investor 

Information Web page, a key tool for informing and educating 

the investing public. In addition, the Office of Investor 

Education and Advocacy (OIEA) publishes hard-copy 

educational brochures and conducts in-person events. This 

measure seeks to determine the total number of investors 

reached by the SEC, and assess the effectiveness of outreach 

efforts conducted by OIEA and the regional offices targeted 

to specific investor groups (for example, seniors, military, or 

other affinity groups). The measure also assesses the use of 

various channels to reach investors, such as the SEC webpage, 

investor.gov, social networking sites, outreach programs, or 

public appearances.

Number of investor 

educational initiatives 

organized and produced 

Target: 5 per year

In partnership with other organizations, the agency will 

develop a number of educational campaigns intended to 

customize content and maximize its reach to various investor 

communities. Through the use of primary and secondary 

research including tracking emerging investor concerns and 

complaints, the agency will compile information on how to 

best target its efforts to the investing public. This measure 

identifies the number of major investor initiatives undertaken. 

Timeliness of responses to 

investor contacts

Target: 80% within seven 

days and 90% within thirty 

days 

OIEA serves the tens of thousands investors each year who 

contact the SEC with investment-related complaints and 

questions. The staff aims to close out as many new investor 

assistance matters as possible within seven and thirty 

business days. 

Percentage of rules 

impacting investors that are 

presented in alternate userfriendly formats

Target: To Be Determined *

The agency intends to publish explanations of Commission 

actions in easily understandable language, to encourage 

investor participation and comments on issues affecting them. 

The agency also will track emerging concerns and trends and 

then transmit the information to the rulemaking divisions 

and other offices for consideration of possible regulatory 

responses. The SEC also may use surveys or questionnaires to 

collect input from investors to assist in assessing their views 

on Commission actions. 
38 U.S. Securities and Exchange Commission

Performance Metric Description

Customer satisfaction 

with usefulness of investor 

educational programs and 

materials 

Target: To Be Determined *

Through the use of focus groups and surveys, the agency will 

assess the usefulness of educational material provided to 

investors across a variety of channels based upon ease of use, 

appropriateness, and other factors.

* These performance metrics are new for the SEC. The agency plans to begin collecting this information and 

determine the current, baseline levels for these metrics before establishing targets.
Strategic Plan for Fiscal Years 2010–2015 39

Strategic Goal 4:

Enhance the Commission’s performance through effective alignment 

and management of human, information, and financial capital

“The SEC is a relatively small agency, but we are charged with protecting tens of 

millions of investors every day. The scope of our responsibility is broad and we feel 

the great weight of that responsibility every single day. Adopting new strategies 

for investing in our people and systems is fundamental to our success. Creating a 

culture of collaboration and leadership across the agency is having a tremendous 

impact on how we fulfill our mission. Through improved information technology 

tools, knowledge management practices, and staff learning and development 

opportunities the agency is transforming its capabilities and achieving better 

results.”

CHAIRMAN MARY L. SCHAPIRO

THE PUBLIC AND THE SECURITIES MARKETS are best served by an efficient, effective, 

and agile SEC. Given the immense size of the securities markets the SEC regulates, the SEC’s 

success in fulfilling its mission is highly dependent upon its ability to continually direct its 

resources towards the most productive uses for investors and the public. The SEC also is 

extremely mindful of its responsibility to optimize the use of its resources because it is a 

government agency entrusted with taxpayer funds. 

The agency continuously enhances its performance by making sound investments 

in human capital and new technologies and by employing strong financial management 

practices. With respect to its workforce, the agency must be able to attract and retain highperforming staff, continually update their skills so they are abreast of the latest developments 

in the industry, and create organizational structures and work processes that are efficient and 

effective. The agency’s information technology environment must give employees the tools 

they need to view, analyze, and act upon the enormous volume of financial data and other 

information relevant to oversight of the securities markets. Finally, the SEC must continually 

direct its financial resources to their highest and best use, always subject to strong internal 

controls.

Outcome 4.1: The SEC maintains a work environment that attracts, engages, and 

retains a technically proficient and diverse workforce that can excel and meet the 

dynamic challenges of market oversight.

The Commission is committed to being an employer of choice by consistently attracting, 

hiring, developing, and retaining a high-quality, diverse, and results-oriented workforce. The 

SEC is continually refining a series of programs to enhance its human capital, such as by 

rewarding high performance, promoting high employee satisfaction, and updating staff skills 

for the effective oversight of the securities markets. 
40 U.S. Securities and Exchange Commission

The expertise and specialized skills necessary for the field of securities regulation are a 

significant factor shaping the agency’s human capital planning efforts. To maintain a pool of 

trained and prepared staff, the SEC is continuing to identify the mission-critical roles and 

competencies the agency requires today and in the future. Senior management, working with 

human resources staff, must identify the requisite skills, determine whether gaps exist in 

the SEC’s workforce, and develop ways to bridge these gaps through training or recruiting 

strategies. The agency structures its recruitment efforts to attract new staff from a wide 

variety of demographic groups as part of its commitment to a diverse workforce. The SEC 

also works to retain high-performing staff, continually evaluating and refining its human capital 

programs to address issues that might affect employee satisfaction.

Initiatives:

To accomplish this outcome, the SEC plans to implement the following initiatives: 

■■ Increase employee engagement and retention: To retain high caliber talent, the SEC will 

implement programs and initiatives focused on employee engagement and retention. 

In response to employee survey results, the SEC has conducted numerous interviews 

and focus groups with its workforce at every level. The recommendations derived from 

this information will form the basis for action plans aimed at improving the agency’s 

organizational climate and workforce morale. These plans will be implemented and 

evaluated in a manner designed to promote continuous improvement. Improvements 

in organizational climate and workforce morale should lead to greater employee 

engagement and increased retention, particularly of high-performing employees. 

■■ Enhance employee development program: For the SEC to fulfill its mission it must 

not only attract and select the most accomplished people in their fields, it must also 

continually invest in their training and development so that each employee can achieve 

and maintain the highest level of performance. Changes in market conditions, securities 

laws, federal regulations, best practices, and technology create challenges that must be 

met by a workforce skilled at managing change and supported by a strategic but flexible 

developmental program. The Office of Human Resources will encourage and monitor 

the use of individual development plans so that employee-specific needs are met. This 

initiative will be further enhanced by the implementation of a learning management 

system to automatically track learning programs, certifications, and competency gaps. 

This system will allow the Office to meet stakeholder reporting requirements efficiently.

■■ Promote a diverse talent pipeline: The SEC will develop and implement strategies 

and programs focused on creating a diverse talent pipeline to meet the SEC’s current 

and future workforce needs. These strategies will include developing and expanding 

strategic partnerships and alliances with diverse educational institutions, professional 

associations, and community-based organizations. These partnerships and business 

alliances will also provide the SEC opportunities to recruit mid-level to high-level 

career professionals from all segments of society. 

■■ Implement new performance management program: To promote the highest level 

of personal and organizational performance, the SEC must have a performance 

management program that is robust, credible, fair, and transparent. In FY 2009, the 

SEC implemented a new performance management system among its managers and 

supervisors. In FY 2010, the SEC will implement a similar system among all Senior 

Officers and non-supervisory staff. The SEC will invest in an extensive training program 
Strategic Plan for Fiscal Years 2010–2015 41

for managers and other employees, evaluate the effectiveness and acceptability of the 

system, make improvements based on results of the evaluation, and support the program 

with technology and experienced consultants.

Performance Metrics:

The SEC intends to use the following performance measures to gauge its progress in 

achieving this outcome:

Performance Metric Description

Survey of employee 

engagement

Target: Biennial Index score 

of 65% positive

The SEC strives to maintain a culture in which employees 

demonstrate a strong personal, positive connection with 

the organization and its mission and strategic goals. This 

connection, which can be called “employee engagement,” 

can result in higher-quality work, willingness to lead or 

participate in special projects, sharing job knowledge with 

others, mentoring other staff, or other positive contributions 

to the agency and its work. This index will be drawn from 

annual survey results and will track the agency’s success in 

improving employee engagement.

Best Places to Work ranking

Target: Ranking of at 

least 5

This biennial ranking of federal government agencies will be 

used to determine the SEC’s overall success in improving our 

organizational climate.

Turnover

Target: Annual rate of no 

more than 8% turnover

The SEC strives to maintain an organizational climate in 

which high-performing employees wish to remain. Although 

turnover can fluctuate based on a variety of factors, including 

the health of the economy and the number of outside job 

opportunities available for SEC staff, the agency aims to keep 

its turnover rate relatively low, below 8% per year. 

Expanding staff expertise 

Target: To Be Determined *

Internal training and hiring programs are designed to 

help the agency recruit and develop its staff so that key 

skills, industry knowledge, and expertise are maintained. 

In particular, there is a need to hire more economists, 

trading specialists, and other experts with knowledge of the 

marketplace and both investment and trading practices. As 

the industry evolves, requisite staff skills and competencies 

are adjusted to stay current. Annual agency training goals 

and hiring practices are focused on ensuring staff have the 

necessary capabilities to address trends in the industry. This 

measure tracks whether certain areas requiring significant 

training are being addressed. 

For example, the agency will monitor the percentage of staff 

that has received or maintained significant relevant training 

in fraud detection as measured by achieving the status of a 

Certified Fraud Examiner, Chartered Financial Analyst, Series 

7, or other relevant industry designations.
42 U.S. Securities and Exchange Commission

Performance Metric Description

Size of competency gaps

Target: 10% reduction 

annually

Key competencies will be rated as part of our Performance 

Management process. Once the SEC has implemented a 

technology system to support the performance management 

program, the agency will assess its baseline competency gaps 

annually and work to bring them down over time.

Number of diversity-related 

partnerships/alliances

Target: 10 partnerships or 

alliances by 2014

Increased numbers of diversity-related partnerships and 

alliances with professional associations and educational 

organizations provide opportunities to educate students 

about the SEC’s work and to recruit career professionals from 

all segments of society. The SEC will track the number of 

partnerships or alliances and monitor the number and quality 

of hires stemming from these partnerships and alliances.

Survey feedback on the 

quality of the SEC’s 

performance management 

program

Target: 65% positive 

responses annually

The SEC will construct an index from survey results to 

determine the extent to which managers and other employees 

find the performance management program valuable, credible, 

transparent, and fair.

* This performance metric is new for the SEC, and the agency must further refine the statistic before 

establishing a target.

Outcome 4.2: The SEC retains a diverse team of world-class leaders who provide 

motivation and strategic direction to the SEC workforce.

The SEC’s success at fulfilling its strategic goals depends upon effective leadership at all 

levels. From branch chiefs to the agency’s senior leadership, the SEC’s leaders must not 

only motivate and manage employees effectively, but also play a critical role in identifying 

the key areas on which staff should focus their attention to generate the greatest benefit for 

investors. Through leadership and employee development programs, the Commission seeks to 

maintain a diverse cadre of technically proficient leaders that can conduct their supervisory 

responsibilities effectively and meet the dynamic challenges of market oversight.

Initiatives:

To accomplish this outcome, the SEC plans to implement the following initiatives: 

■■ Leadership development program: To make certain the SEC has the caliber of 

leadership commensurate with its mission, the SEC will continue the construction and 

implementation of a comprehensive leadership development program. Specific aspects 

of the program include improving training for new supervisors, building skills in change 

management, increasing the number and scope of developmental opportunities for all 

leaders, and instituting a program to prepare non-supervisors to assume supervisory 

roles. In addition, the SEC will gradually institute a 360-degree feedback program for 

all Senior Officers and supervisors. The program will include targeted feedback, tailored 

developmental opportunities, and coaching.
Strategic Plan for Fiscal Years 2010–2015 43

■■ Employ evidence-based selection: Ensuring that those with the greatest capacity for 

leadership are chosen for managerial positions is a key step in enhancing the leadership 

of the SEC. To achieve this objective, the SEC will enhance its approach towards 

selection, by training and supporting hiring officials in the use of better selection 

criteria, including the development and implementation of behavioral interviews. Once 

instituted, the SEC will consider whether to expand this approach to non-supervisory 

positions.

Performance Metrics:

The SEC intends to use the following performance measures to gauge its progress in 

achieving this outcome:

Performance Metric Description

Quality of Hire

Target: 75% rated at least 

4 on a five-point scale 

annually

Data related to each new hire will be gathered from either the 

immediate supervisor or the selecting official, as appropriate. 

Data will be gathered three months after entry on board. This 

early assessment will not only inform the agency’s selection 

system, but will provide an opportunity to address quickly 

any developmental needs or performance issues.

Leadership Competency 

Gaps

Target: Reduce gaps by 10% 

in each survey

A 360-degree feedback survey will be conducted across all 

leadership ranks. This will provide an SEC-wide score on 

each competency measured in the survey. The gap will be 

determined by subtracting the obtained scores from expected 

proficiency levels on key competencies. Progress will be 

determined by comparing this baseline to scores obtained 

from subsequent administrations of the survey.

Satisfaction with Leadership 

Development Program 

Target: Average score of 4 on 

a 5-point scale

After each major developmental event participants will 

complete a survey of items related to key training outcomes. 

Responses to these items will be compiled to create a 

composite score.

Outcome 4.3: Information within and available to the SEC becomes a Commissionwide shared resource, appropriately protected, that enables a collaborative and 

knowledge-based working environment. 

Information technology plays a crucial role in the mission of the SEC. The increasing size 

and complexity of the U.S. markets require that the SEC leverage technology to continuously 

improve its productivity, as well as identify and address the most significant threats to 

investors. Information technology is an increasingly vital function to the SEC in modernizing 

filing practices, disseminating the vast quantity of regulatory filings, managing the large 

number of internal business processes and work products, and protecting the agency’s 

information assets. 

The SEC gathers a wide variety of financial data and other information from a variety of 

sources, including filings, the agency’s investigations and examinations, tips and complaints, 

and commercial vendors. The agency is working to build systems that will allow more of this 

information to be quickly shared, analyzed, and joined with other information about the same 
44 U.S. Securities and Exchange Commission

entity or individual. These efforts hold promise to save staff time, provide better information 

about the firms the SEC regulates, and enhance the agency’s ability to uncover hidden risks to 

investors.

The SEC also continually invests in the agency’s information technology infrastructure 

to maintain the necessary capacity, performance, resiliency, and security required to support 

the agency’s business processes and information stores. The SEC will continue to improve 

the enterprise architecture, capital planning and investment control, information security 

management and privacy management programs to effectively oversee its information 

technology systems.

Initiatives:

To accomplish this outcome, the SEC plans to implement the following initiatives: 

■■ Make disclosure information more useful for analysis: Disclosure documents are 

submitted to the Commission electronically and, as appropriate, disseminated 

electronically to the investing public. This initiative will review the current disclosure 

systems and processes and identify ways to optimize the use of technology to improve 

the way disclosure documents are constructed and submitted with more emphasis on 

data collection. A new filing system that is optimized for data retrieval and analysis 

will provide features that help users create filings that are appropriate to their purpose 

and that allow computers to extract data from the filings for automated analysis. The 

system will be more flexible, so as new disclosure documents are defined they can be 

implemented much more quickly, with all of the features of a modern, web-based filing 

system. Eventually, new filings structured for automated data retrieval and analysis will 

replace all filings submitted through the EDGAR system. 

■■ Improve SEC’s information management and analysis functions: The SEC aims to 

provide access to information and effective analytical capabilities for all appropriate 

staff in the agency. To accomplish this outcome, the SEC will work on several fronts 

to improve its abilities to acquire, store, manage, and deliver data and information in 

support of its critical business functions. Among the steps in this effort are cataloging 

the SEC’s data and its interrelationships; ensuring data quality; and establishing 

new methods for capturing information, including from SEC staff themselves as they 

conduct examinations, investigations, and other activities. 

■■ Enhance workflow and document management: Virtually all business processes within 

the Commission involve the acquisition, creation, review, and editing of documents. 

These processes are conducted informally without the benefit of automated tracking, 

notification, and auditing capabilities. Under this initiative, the SEC will assess 

its critical business processes and apply document management tools to increase 

productivity, enhance collaboration, and create a shared repository of essential 

documents and data. Among the business areas that would benefit from this effort are 

enforcement case management, disgorgement and penalties, examination management, 

management of Commission actions, filing of administrative proceedings, and 

rulemaking.

■■ Enhance the SEC’s electronic discovery program: The SEC must have the technical 

capability to electronically organize and retrieve an extraordinary volume of documents 

obtained in the conduct of investigations. Under this initiative, the SEC will enhance 

the agency’s current electronic discovery tools, to improve the agency’s document 

storage, organization, and analytic capabilities. The agency also will create a repository 
Strategic Plan for Fiscal Years 2010–2015 45

of documents and data that is more widely available across cases and with other 

Commission business functions as appropriate.

■■ Enhance operational resiliency: The SEC will support a reliable mobile computing 

environment that provides high performance, security, and cost effectiveness. The agency 

also will enhance the computing infrastructure, including through server virtualization 

and clustering, to eliminate down time if systems at one site fail, enhance security, and 

achieve cost savings. 

Performance Metrics:

The SEC intends to use the following performance measures to gauge its progress in 

achieving this outcome:

Performance Metric Description

Percentage of SEC data 

sources accessible through a 

virtual data warehouse, and 

milestones achieved towards 

the creation of a robust 

information management 

program

Data sources accessible 

through virtual data 

warehouse: 

Target to be determined.* 

Milestones: Target is to stay 

on schedule to “enable” all 

SEC data sources by 2013.

The SEC intends to reform its information management 

processes, so that data can be more easily accessed, shared, 

and analyzed across the organization. This metric will display 

the percentage of SEC data sources accessible for search and 

analysis through a virtual data warehouse. In addition, the 

SEC will track its success in achieving relevant milestones 

over the course of this multi-year effort. These milestones 

include establishing a formal information management 

program in 2010, completing an information catalog by 2011, 

providing capabilities to support analysis of information by 

2012, and developing a capability that allows integration 

of business operations data for management, reporting and 

analysis by 2013.

Deployment of document 

management and workflow 

tools

Target: Deployment of tools 

for the enforcement and 

examination programs by 

2010 and other key offices 

such as the Office of the 

Secretary by 2011.

This metric will present the SEC’s success in applying 

document management and workflow tools to the 

Commission’s mission critical business functions. Over 

time, the SEC aims to deploy these tools for enforcement 

case management, the agency’s processes for handling 

disgorgement and penalties, examination management, 

management of Commission actions, and rulemaking. 
46 U.S. Securities and Exchange Commission

Performance Metric Description

Time to process evidentiary 

material for enforcement 

investigations

Target: To Be Determined *

The SEC aims to improve its ability to process evidentiary 

material gathered during the course of its enforcement 

investigations, and enhance the agency’s document storage, 

organization, and analytical capabilities. This metric will 

gauge whether these efforts succeed in reducing the time 

required to process evidentiary material, so it can be analyzed 

by enforcement staff. 

System Availability

Target: Systems are available 

more than 99% of the time; 

all systems and applications 

fail over within 4 hours of 

a data center outage; 50% 

of all SEC systems are 

virtualized by 2014.

The SEC aims to enhance its computing infrastructure 

to eliminate down time if systems at one site fail, among 

other objectives. This metric will capture the percentage of 

systems and applications that can fail over within 4 hours. 

In addition, the SEC will track the percentage of its systems 

that have been virtualized, further reducing down time and 

increasing their accessibility from alternative locations. 

* This performance metric is new for the SEC. The agency plans to begin collecting this information and 

determine the current, baseline level for this metric before establishing a target.

Outcome 4.4: Resource decisions and operations reflect sound financial and risk 

management principles.

The public has every right to expect that the SEC will maintain strong financial management 

practices and robust internal controls. The SEC is placing great emphasis on bolstering 

its processes and systems in its budgeting, accounting, and internal control functions. In 

addition, the agency continues to focus on delivering complete, concise, and meaningful 

information about the financial and operating performance of the agency that supports 

management decision making. 

Initiatives:

To accomplish this outcome, the SEC plans to implement the following initiatives: 

■■ Better integrate data from SEC administrative functions: To accomplish the SEC’s 

mission it is essential that management decisions are based on the best available 

information from multiple sources. This requires integrating information from human 

resources, financial management, information technology, and administrative services 

functions. To improve decision making and reporting capabilities, the SEC will examine 

its data collection, analysis and reporting methods to determine areas for improvement. 

■■ Achieve full integration of the SEC’s financial systems: The key to strengthening the 

agency’s internal controls is to fully integrate the agency’s financial management 

systems. This initiative will fully interface all systems affecting the financial status of 

the agency, using a service-oriented architecture that will allow changes to be made to 

one system without affecting other interfaced systems.
Strategic Plan for Fiscal Years 2010–2015 47

■■ Continue strong performance and accountability reporting: Under the Accountability 

of Tax Dollars Act of 2002, the agency is required to prepare and submit annual audited 

financial statements. The SEC’s audits are conducted by the Government Accountability 

Office (GAO). The agency strives to maintain the highest standards of internal control 

and financial reporting. Agency staff will continue to evaluate and strengthen the 

agency’s internal control posture to support unqualified audit opinions.

Performance Metrics:

The SEC intends to use the following performance measures to gauge its progress in 

achieving this outcome:

Performance Metric Description

Milestones achieved towards 

establishment of a robust 

data management program 

Target: 

a) Key administrative data 

and reporting requirements 

identified by FY 2010;

b) Relevant mission 

program data and reporting 

requirements identified by 

FY 2011;

c) All key processes for data 

collection and reporting 

(based on (a) and (b) above) 

determined and documented 

by FY 2012;

d) An integrated, automated 

data management program 

established by FY 2014, 

providing regular and ad hoc 

reporting and analysis.

A business process improvement effort will be initiated 

to identify enhancements needed to create a robust data 

management program over the next five years. This metric 

will gauge the agency’s success in establishing an integrated 

enterprise data management, reporting, and analysis 

capability for mission and back office data.

Financial systems integration

Target: All interfaces 

between the core financial 

system and secondary 

systems that impact the 

Commission’s financial 

statements are automated.

As part of the SEC’s effort to integrate its financial systems, 

the agency will measure the percentage of secondary systems 

that are fully interfaced with the core financial system, in 

compliance with applicable standards.
48 U.S. Securities and Exchange Commission

Performance Metric Description

Financial audit results

Target: An unqualified 

audit opinion on SEC 

financial statements and no 

material weakness or nonconformance.

Under the Accountability of Taxpayer Dollars Act of 2002, 

the agency is required to meet all proprietary and budgetary 

accounting guidelines for federal agencies and to undergo 

annual audits. The SEC’s audits are conducted by the 

Government Accountability Office.
Strategic Plan for Fiscal Years 2010–2015 49

Program Evaluation

The SEC values independent, high-quality assessments of the agency’s performance against 

its goals and desired outcomes. Such assessments are critical to the Commission’s ability 

to evaluate its work, refine its programs, and redirect resources accordingly. The more 

than 150 audits, studies, and evaluations of SEC programs and securities industry-related 

issues completed since the release of the agency’s previous Strategic Plan have served as an 

important resource in the development of this Strategic Plan. Over the next five years, the 

SEC will continue to draw on evaluations from a variety of sources to improve its programs.

Performance and Accountability Report

Beginning in fall 2004, the SEC has published annually a Performance and Accountability 

Report (PAR), describing the agency’s accomplishments and presenting the results associated 

with the agency’s performance metrics. The most recent version of the SEC’s PAR can be 

found on the agency’s website, at www.sec.gov. The SEC’s Reports for FY 2006, FY 2007, 

and FY 2008 all have received the prestigious Certificate of Excellence in Accountability 

Reporting from the Association of Government Accountants. 

Consultation with Outside Groups

The SEC frequently seeks the input of investors, industry groups, academia, and other experts 

to gain outside perspectives about its programs and various issues in the securities industry. 

These efforts include the SEC’s newly-formed Investor Advisory Committee; Commissionsponsored roundtables focused on specific issues; the agency’s Annual Government-Business 

Forum on Capital Formation, focused particularly on the needs of new, small, medium-sized, 

and independent businesses; the SEC’s annual conference with the North American Securities 

Administrators Association; and solicitations of public comments on Commission rule 

proposals. 

Government Accountability Office

The Government Accountability Office conducts dozens of studies or investigations related 

to the SEC’s programs every year. In FY 2009, GAO’s reports covered communication and 

utilization of resources within the enforcement program, oversight of clearing agencies, and 

the Commission’s rules regarding short selling, among other areas. In addition, GAO performs 

an annual audit of the SEC’s financial statements and internal controls. 

Office of the Inspector General

The Office of Inspector General (OIG) is an independent office within the SEC that conducts 

audits of programs and operations of the Commission and investigations into allegations of 

misconduct by staff or contractors. In FY 2009, OIG reports covered the agency’s oversight of 

Nationally Recognized Statistical Rating Organizations, SEC’s activities involving Bernard L. 

Madoff, as well as procurement and contract management functions, among other areas.

Independent Evaluations

During 2009, the agency sought review of its complaints, tips, and referrals process. The 

evaluation was conducted by the Center for Enterprise Modernization, a federally funded 

research and development center operated by the MITRE Corporation. Recommendations 
50 U.S. Securities and Exchange Commission

resulting from the assessment touch upon operations across the SEC and are currently being 

implemented. A review of the agency’s processes for managing Freedom of Information Act 

requests also was conducted to improve response times and reduce the backlog of pending 

requests. 

The SEC is expanding the use of surveys conducted by independent organizations as 

part of its program evaluation practices. In addition to the Federal Employee Viewpoint 

Survey conducted by the Office of Personnel Management, the agency will participate in 

the American Customer Satisfaction Index covering the government sector. Independent 

assessments to evaluate the effectiveness of internal controls over agency financial reporting 

and its information technology long-term strategy also are planned.
Planning for the Future

U.S. Securities and Exchange Commission

www.sec.gov 

www.investor.gov