U.S. Securities and Exchange Commission 

FY 2010 Congressional Justification in Brief 

TABLE OF CONTENTS 

Subject Page 

Tables 

FTE and Positions by Program .................................................... 1 

Obligations by Object Class ....................................................... 2 

Average Salary and Grade.......................................................... 2 

FY 2010 Request by Strategic Goal and Program .............................. 3 

Summary of Changes ............................................................... 4 

Fee Collections and Spending Authority ......................................... 5 

Appropriations Language ........................................................ 6 

Request by Strategic Goal 

FY 2010 Request by Strategic Goal ............................................. 7 

Goal 1: Enforce Compliance with Federal Securities Laws ......... 10 

Goal 2: Promote Healthy Capital Markets .............................. 18 

Goal 3: Foster Informed Investment Decision Making ............... 26 

Goal 4: Maximize the Use of SEC Resources .......................... 32 

Request by Program 

Division of Enforcement ........................................................... 37 

Office of Compliance Inspections and Examinations .......................... 38 

Division of Corporation Finance .................................................. 39 

Division of Trading and Markets ................................................. 40 

Division of Investment Management ............................................ 41 

Office of the General Counsel .................................................... 42 

Other Program Offices ............................................................. 43 

Office of Chief Accountant ............................................... 44 

Office of Investor Education and Advocacy ........................... 45 

Office of International Affairs ............................................ 46 

Office of Economic Analysis ............................................. 47 

Office of Risk Assessment ............................................... 48 

Office of the Administrative Law Judges .............................. 49 

Agency Direction and Administrative Support ................................ 50 

 Agency Direction .......................................................... 51 

Office of the Executive Director ......................................... 52 

Office of Information Technology ....................................... 53 

Office of Equal Employment Opportunity .............................. 54 

Office of the Inspector General .......................................... 55
 
 

 

 

 

 

 

 

 

 

 

FTE and Positions by Program 

FY 2008 

Actual 

FY 2009 

Enacted 

FY 2010 

Request 

FTE Positions FTE Positions FTE Positions 

Enforcement

 Headquarters 410 463 434 486 452 486

 Regions 738 771 740 771 740 771

 Total 1,148 1,234 1,174 1,257 1,192 1,257 

Compliance Inspections and Examinations 

 Investment Company/Investment Adviser 

Headquarters 44 51 46 56 48 56

 Regions 381 418 406 418 406 418

 Subtotal 

 Broker-Dealer/Self-Regulatory Organization 

425 469 452 474 454 474

 Headquarters 89 102 100 107 104 107

 Regions 276 288 276 288 276 288

 Subtotal 365 390 376 395 380 395

 Total 790 859 828 869 834 869 

Corporation Finance 441 484 463 484 463 484 

Trading and Markets 167 200 174 208 182 208 

Investment Management 149 161 153 162 154 162 

General Counsel 

Headquarters 121 133 120 135 122 135

 Regions 11 12 11 12 11 12

 Total 132 145 131 147 133 147 

Other Program Offices 

Chief Accountant 55 72 54 72 54 72

 Investor Education and Advocacy 65 75 68 75 68 75

 International Affairs 30 32 32 32 32 32

 Economic Analysis 22 36 26 36 26 36

 Risk Assessment 3 9 8 12 10 12

 Administrative Law Judges 9 12 11 12 11 12

 Total 184 236 199 239 201 239 

Agency Direction and Administrative Support 

 Executive Staff 34 38 38 38 38 38

 Public Affairs 7 9 8 9 8 9

 Secretary 41 46 41 46 41 46

 Executive Director 8 11 11 11 11 11

 Financial Management 51 65 57 68 60 68

 Human Resources 59 68 62 68 62 68

 Administrative Services 86 97 90 97 90 97

 Information Technology 126 138 127 138 127 138

 Equal Employment Opportunity 8 10 8 10 8 10

 Inspector General 11 16 16 16 16 16

 Total 431 498 458 501 461 501 

Total FTE and Positions 3,511 3,891 3,652 3,941 3,692 3,941

 Headquarters Total Permanent 2,036 2,328 2,147 2,378 2,187 2,378

 Regional Office Total Permanent 1,406 1,489 1,433 1,489 1,433 1,489

 Temporary 69 74 72 74 72 74 

-1-
 

 

 

 

 

 

 

 

 

 

 

 

Obligations by Object Class 

($ in thousands) 

FY 2008 

Actual * 

FY 2009 

Enacted ** 

FY 2010 

Request 

Personnel Compensation & Benefits

 Total Personnel Compensation (11.9) $476,900 $522,752 $566,343 

Full-time Permanent (11.1) 464,547 510,347 551,658 

Other than Full-time Permanent (11.3) 3,064 3,699 4,163 

Other Personnel Compensation (11.5) 7,322 6,595 8,268 

Special Personnel Services (11.8) 1,967 2,111 2,254 

 Civilian Personnel Benefits (12.1) 129,466 139,034 151,557 

Subtotal Cost of Salaries $606,366 $661,786 $717,900 

Other Expenses 

 Benefits for Former Personnel (13.0) 120 445 450 

 Travel and Transportation of Persons (21.0) 11,015 11,647 11,986 

 Transportation of Things (22.0) 115 228 230 

 Rent, Communications & Utilities (23.0) 106,989 105,117 107,662 

Rental Payments to Others (23.2) 96,905 93,126 95,420 

Comm., Utilities, and Misc. Charges (23.3) 10,084 11,991 12,242 

 Printing and Reproduction (24.0) 9,706 6,810 6,896 

 Other Contractual Services (25.0) 129,668 149,797 155,506 

Advisory and Assistance Services (25.1) 29,134 27,245 27,623 

Other Services (25.2) 

Purchase of Goods & Services from

24,095 33,082 33,629 

 Government Accounts (25.3) 2,874 3,712 3,750 

Operation & Maintenance of Facilities (25.4) 6,776 7,665 7,741 

Operation & Maintenance of Equipment (25.7) 66,789 78,093 82,763 

 Supplies and Materials (26.0) 3,282 2,612 2,688 

 Equipment (31.0) 31,568 18,875 19,367 

 Building Alterations (32.0) 2,673 2,683 3,315 

 Claims and Indemnities (42.0) 3,811 0 0 

Subtotal Cost of Other Expenses $298,947 $298,214 $308,100 

Spending Authority $905,313 $960,000 $1,026,000 

* FY 2008 Actual excludes $10M in upward adjustments of prior year obligations that were included in the President's FY 2010 Budget Appendix. 

** FY 2009 Enacted includes Congressionally approved reprogramming request of $17 million. 

Average Salary and Grade 1/ 

FY 2008 FY 2009 FY 2010 

Actual Enacted Request 

Average SO Salary $214,174 $223,812 $233,212 

Average SK Salary $134,239 $140,280 $148,364 

Average SK Grade 13 13 13 1/ Average salary as of the last day of the fiscal year. 

-2-
FY 2010 Request by Strategic Goal and Program 

($ in thousands) 

SEC Program 

FY 2010 Request 

FY 2008* 

Actual 

FY 2009 ** 

Enacted 

Goal 1 Goal 2 Goal 3 Goal 4 

Enforce Healthy Informed Maximize 

Securities Capital Decision Use of FY 2010 

Laws Markets Making Resources Request 

FY 2008* Actual $614,395 $80,322 $120,712 $89,884 FY 2009 Enacted ** $607,823 $89,691 $164,582 $97,904 Enforcement $317,986 $330,132 $353,446 $0 $0 $0 $353,446 

Headquarters 131,727 143,828 156,383 0 0 0 156,383 

Regions 

Compliance Inspections

186,259 186,304 197,063 0 0 0 197,063 

 and Examinations 201,348 210,824 224,613

 0

 0

 0

 224,613 

IC/IA Program 108,414 114,682 121,831

 0

 0

 0

 121,831 

Headquarters 11,408 11,796 13,033 0 0 0 13,033 Regions 97,006 102,886 108,798 0 0 0 108,798 

BD/SRO Program 92,934 96,142 102,782

 0

 0

 0

 102,782 

Headquarters 23,076 25,645 28,239 0 0 0 28,239 Regions 69,858 70,497 74,543 0 0 0 74,543 

Corporation Finance 111,058 119,160 1,261 16,399 108,484 0 126,144 

Trading and Markets 41,838 45,811 8,588 27,282 14,651 0 50,521 

Investment Management 44,298 46,924 11,993 22,487 15,491 0 49,971 General Counsel 34,577 35,269 23,496 5,684 1,895 6,821 37,896 

Headquarters 31,761 32,431 21,636 5,234 1,745 6,281 34,896 Regions 2,816 2,838 1,860 450 150 540 3,000 

Other Program Offices Agency Direction and 

50,019 55,136 17,842 19,255 18,874 1,650 57,621 

 Administrative Support 104,189 116,744 5,490 5,825 13,727 100,746 125,788 

Total SEC Funding $905,313 $960,000 $646,729 $96,932 $173,122 $109,217 $1,026,000 Percent Increase over Prior Year 6% 8% 5% 12% 

* FY 2008 Actual excludes $10M in upward adjustments of prior year obligations that were included in the President's FY 2

** FY 2009 Enacted includes Congressionally approved reprogramming request of $17 million. 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

Summary of Changes 

($ in thousands) 

FY 2009 FY 2010 Net 

Enacted Request Change 

Spending Authority..................................... $960,000 $1,026,000 +$66,000 

Full-time Equivalents.................................... 3,652 3,692 +40 

Positions.................................................. 3,941 3,941 - - -

Explanation of Changes: Positions FTE Amount 

FY 2010 Base Changes 

Annualization of 50 positions received 

in FY 2009 - - - +40 +$9,445 

Annualization of FY 2009 4.5 % pay 

raise +9,459 

FY 2010 pay raise, 4.2% effective first 

full pay period in January 2010 - - - - - - +21,124 

Promotions and merit pay increases for - - - - - - +16,621 

eligible staff 

Increases in space rent and utilities - - - - - - +2,316 

Other non-compensation inflation of 1% - - - - - - +2,035 

Subtotal, Base Changes - - - +40 +61,000 

Program Increase: 

Information Technology Enhancements - - - - - - +5,000 

Total Change........................... - - - +40 +$66,000 

- 4 -
 

 

 

Fee Collections and Spending Authority 

Actual/Target Fee Collections under P.L. 107-123 

$0 

$500 

$1,000 

$1,500 

$2,000 

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 

Actual Actual Actual Actual Actual Actual Actual Target Target Target 

Fiscal Year 

* Fees collected under Sections 13(e) and 14(g) do not have collection targets specified in statute. Rather, the rates for these fees must equal the 

rates assessed under Section 6(b). 

FY 2008 FY 2009** FY 2010** 

Actual Estimate Estimate 

Source of Fees ($ in thousands) 

Registration of securities: Securities Act of 1933 

(Section 6(b)) $148,057 $284,000 $334,000 

Securities transactions under the Securities Exchange 

Act of 1934 (Section 31) 822,614 1,023,000 1,161,000 

Merger and Tender Fees under the Securities 

Exchange Act of 1934 (Sections 13(e) and 14(g)) 13,106 25,000 25,000 

Total Collections $983,777 $1,332,000 $1,520,000 

** FY 2009 and FY 2010 estimates are based on target fee collections under P.L. 107-123 and are not based on expectations relative to economic and market 

conditions. 

FY 2008 FY 2009 FY 2010 

Actual Enacted Request 

Spending Authority ($ in thousands) 

Current Year Appropriated Offsetting Collections $842,738 $894,356 $1,015,780 

Available Balances from Prior Years 63,262 65,644 10,220

 Total Authority $906,000 $960,000 $1,026,000 

- 5 -
Appropriations Language 

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

authorized by 5 U.S.C. 3109, the rental of space (to include multiple year leases) in the 

District of Columbia and elsewhere, and not to exceed $3,500 for official reception and 

representation expenses, $1,026,000,000, to remain available until expended; of which not 

to exceed $20,000 may be used toward funding a permanent secretariat for the 

International Organization of Securities Commissions; and of which not to exceed 

$100,000 shall be available for expenses for consultations and meetings hosted by the 

Commission with foreign governmental and other regulatory officials, members of their 

delegations, appropriate representatives and staff to exchange views concerning 

developments relating to securities matters, development and implementation of 

cooperation agreements concerning securities matters and provision of technical assistance 

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

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

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

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

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

fees and charges authorized by sections 6(b) of the Securities Act of 1933 (15 U.S.C. 

77f(b)), and 13(e), 14(g) and 31 of the Securities Exchange Act of 1934 (15 U.S.C. 

78m(e), 78n(g), and 78ee), shall be credited to this account as offsetting collections: 

Provided further, That not to exceed $1,015,780,000 of such offsetting collections shall be 

available until expended for necessary expenses of this account: Provided further, That 

$10,220,000 shall be derived from prior year unobligated balances from funds previously 

appropriated to the Securities and Exchange Commission: Provided further, That the total 

amount appropriated under this heading from the general fund for fiscal year 2010 shall be 

reduced as such offsetting fees are received so as to result in a final total fiscal year 2010 

appropriation from the general fund estimated at not more than $0. 

- 6 -
FY 2010 Request by Strategic Goal 

The mission of the Securities and Exchange Commission (SEC) is to protect investors; 

maintain fair, orderly, and efficient markets; and facilitate capital formation. The SEC 

oversees 11 national securities exchanges and more than 30,000 registrants including 

approximately 12,000 public companies, 8,000 mutual funds, 11,300 investment advisers, 

600 transfer agencies, and 5,500 broker-dealers. Additionally, the Public Company 

Accounting Oversight Board (PCAOB), the Financial Industry Regulatory Authority 

(FINRA), and ten nationally recognized statistical rating organizations (NRSROs), among 

other entities, are subject to inspection by the SEC. The number and complexity of 

registrants and the total assets for which the SEC has oversight responsibility have 

increased dramatically over the past few years: 

•	 Since 2005 the number of investment advisers registered with the SEC has increased by 

32 percent and their assets under management have jumped by over 70 percent to more 

than $40 trillion. 

•	 The size, complexity, and geographical diversity of broker-dealer operations have 

greatly expanded, with the number of broker-dealer branch offices rising to a current 

total of 174,000. 

•	 The dollar value of average daily trading volume in stocks, exchange-traded options, 

and security futures was approximately $251 billion a day in February 2009, as 

compared to approximately $87 billion a day in February 1999 and $10 billion a day in 

February 1989. 

The impact of these registrants on the financial well-being of Americans is significant: 

more than 52 million U.S. households, or 45 percent of total households, own mutual 

funds, and assets under mutual funds’ management total about $9.4 trillion as of January 

31, 2009. 

The past year has been immensely challenging for investors, public companies, and the 

U.S. and global financial markets. American families have seen their retirement plans and 

savings plummet in value. Faith in the U.S. system of capital formation has been severely 

tested with the economic crisis, the turmoil in the markets, and the revelations of illegal 

and ill-advised investment schemes. 

It is against this backdrop that the SEC works to restore investors’ confidence in the U.S. 

markets by refocusing its efforts on deterring and detecting fraud and reengineering its 

internal processes to work more efficiently and effectively. The SEC’s FY 2010 budget 

poises the agency to accomplish this. The budget request for FY 2010 totals $1.026 

billion, a $66 million (7 percent) increase over the agency’s FY 2009 funding level of $960 

million. The FY 2010 budget funds 3,620 permanent full-time equivalents (FTE), an 

increase of 40 FTE (1 percent) from the FY 2009 level, and maintains the number of 

permanent positions at 3,867. The agency has focused on hiring to capacity throughout FY 

2008 and in FY 2009, targeting the enforcement and examination programs for the 

- 7 -
 

majority of staffing increases. Most of the FTE increases in FY 2010 also will be in these 

two program areas. Chart 1 depicts how the agency plans to allocate its resources in FY 

2010 to achieve the goals identified in the agency’s strategic plan. 

Chart 1 

FY 2010 Request by Strategic Goal 

($ in thousands) 

Goal 1 

Enforce Compliance with Federal Securities Laws 

$646,729 (63%) 

Goal 4 

Maximize the use of SEC Resources 

$109,217 (11%) 

Goal 2 

 Promote Healthy Capital Markets 

$96,932 (9%) 

Goal 3 

Foster Informed Investment Decision Making 

$173,122 (17%) 

The SEC’s programs work together to achieve the four strategic goals. Among other 

things, these programs seek to detect and address violations and potential problems in the 

securities markets; craft regulations that strengthen corporate and fund governance; 

provide investors with timely access to accurate, adequate, and useful disclosure materials; 

and ensure that the agency’s human capital strategies, information technology initiatives, 

and resources are appropriately aligned to achieve the agency’s mission, goals, and 

outcomes. Chart 2 specifies how the agency plans to allocate its resources to the programs 

in FY 2010. 

- 8 -
Chart 2
 

FY 2010 Request by SEC Program
 

($ in thousands) 

Other Program Offices 

$57,621 (6%) Agency Direction & Administrative Support 

201 FTE (5%) $125,788 (12%) General Counsel 

$353,446 (34%) $49,971 (5%) 

461 FTE (13%) $37,896 (4%) 

133 FTE (4%) 

Enforcement 

Investment Management 

1,192 FTE (33%) 

154 FTE (4%) 

Trading and Markets
 

$50,521 (5%)
 

182 FTE (5%) Corporation Finance Compliance Inspections & Examinations 

$126,144 (12%) $224,613 (22%) 

463 FTE (13%) 834 FTE (23%) 

The following chapters comprise the agency’s performance budget for FY 2010, which 

explains how the SEC plans to use the requested resources to achieve each of its four 

strategic goals. The performance budget presents the measures and indicators that the 

agency currently uses to help determine its success in achieving planned outcomes. 

To complement the FY 2010 performance budget, the agency also presents its FY 2010 

budget by program. Each program chapter provides detailed information on program 

priorities, initiatives, and workload figures for a division and/or office. 

- 9 -
 

 

 

 

 

Goal 1: Enforce Compliance with Federal Securities Laws 

The SEC seeks to detect problems in the securities markets, prevent and deter violations of 

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

the Commission aims to take prompt action to halt the misconduct, sanction wrongdoers 

effectively, and return funds to harmed investors. In FY 2010, the agency will focus on 

pursuing tips, complaints, and other leads, dedicating increased resources to potential 

frauds that citizens bring to the staff’s attention. The agency also will expand its 

inspections of credit rating agencies and strengthen risk-based surveillance and 

examination oversight of investment advisers. The enforcement and examination 

programs will work to incorporate risk assessment into all aspects of their operations, with 

the assistance of the Office of Risk Assessment. The agency plans to devote 

approximately $647 million and 2,272 permanent FTE to achieving this goal. 

Chart 3 

Compliance Inspections & Examinations (37%) 

FY 2010 Request (Permanent FTE) 

2,272 Total FTE 

Compliance Inspections & Examinations (35%) 

FY 2010 Request ($ in thousands) 

$646,729 Total Cost 

Trading and Markets (1%) Trading and Markets (1%) 

Investment Management Investment Management (2%) General Counsel (4%) General Counsel (4%) Other Program Offices (3%) Other Program Offices (3%)
 

Enforcement (52%) Agency Direction & Enforcement (54%) Agency Direction & 

Administrative Support (1%) Administrative Support 

(1%)
 

Outcome 1.1: Potential problems or issues in the securities markets are detected 

early and violations of federal securities laws are prevented. 

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

conducts the SEC’s examination program to detect violations of the federal securities laws 

and evaluate internal compliance controls at firms registered with the SEC. In FY 2010, 

OCIE plans to enhance its risk assessment and surveillance methodologies as it continues 

to address areas that are critical in light of financial and market events, through focused 

examinations, sweep exams, and cause exams. The office plans to devote additional 

resources to assessing how investment advisers and broker-dealers verify the existence of 

and maintain control and custody of their clients’ assets. 

Exams that result in “significant” findings (Indicator 1) include violations that are the same 

as those found in a previous exam; lead to a referral to a self-regulatory organization 

(SRO) or the Division of Enforcement for investigation; or result in significant corrective 

action by the firm. OCIE communicates its findings to registrants in the form of 

deficiency letters (Measure 1), providing firms the opportunity to respond to the exam 

- 10 -
 

 

results and remedy problems and risks. While the percentage of registrants taking 

corrective action fell below the target of 95 percent in FY 2007 and FY 2008, OCIE 

expects to meet the target level in FY 2009 and FY 2010. 

In addition to the targeted, sweep, and cause exams it plans to conduct in FY 2010, OCIE 

plans to continue its cycle of examining higher-risk advisers at least once every three years 

(Measure 2). These exams evaluate a firm’s compliance program, apply forensic tests 

designed to uncover schemes to defraud investors, and contribute to establishing a firm’s 

risk rating. The estimated percentages of all registered investment advisers and investment 

companies examined in FY 2010 (Measure 3) are lower than in the prior three years, due to 

an increase in advisers registered with the SEC, as well as a continued focus on exams for 

high-risk entities that are more complex and time-consuming. The percentage of brokerdealers examined by the SEC or an SRO in FY 2010 is expected to be 55 percent, 

continuing the general upward trend in broker-dealers examined annually since FY 2006, 

as the overall number of these registrants has decreased. 

OCIE strives to complete the vast majority of its exams within four months so that firms 

are able to take corrective action as quickly as possible. The office plans to continue 

completing about 80 percent of its non-sweep exams within 120 days of the end of the 

staff’s field work (Measure 4). OCIE also will continue to assist registered firms in 

complying with the securities laws and preventing deficiencies through its CCOutreach 

program, using the feedback of participants to refine the program as needed (Measure 5). 

Goal 1: Measure 1 

Percentage of firms receiving deficiency letters that stated they took or would take corrective action in 

response to all exam findings 

Description: 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 ensure that they do not recur. This measure was developed in 2007 as 

part of the strategic planning process. FY 2005 data are not available. 

Fiscal Year 

FY 

2005 

FY 

 2006 

FY 

 2007 

FY 2008 

Plan 

FY 2008 

Actual 

FY 

2009 

FY 

2010 

Percentage N/A 95% 94% 95% 93% 95% 95% 

Goal 1: Measure 2 

Percentage of advisers deemed “high risk” examined during the year 

Description: To conduct oversight of investment advisers, the staff conducts a risk-based program of 

examinations. 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. This 

measure was developed in 2007 as part of the strategic planning process. FY 2005 data are not available. 

Fiscal Year 

FY 

2005 

FY 

 2006 FY 2007 

FY 2008 

Plan 

FY 2008 

Actual 

FY 

2009 

FY 

2010 

Percentage N/A 33% 33% 33% 33% 33% 33% 

- 11 -
 

 

 

 

 

Goal 1: Measure 3 

Percentage of registrant population examined during the year 

Description: This measure indicates the number of registrants examined by the Securities and Exchange 

Commission (SEC) or a self-regulatory organization (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, and oversight examinations of brokerdealers to test compliance and the quality of the SROs’ inspections, and examinations by the Financial Industry 

Regulatory Authority (FINRA) of broker-dealer firms. This measure was developed in 2007 as part of the strategic 

planning process. FY 2005 data are not available. 

Fiscal Year 

FY 

2005 

FY 

2006 

FY 

2007 

FY 2008 

Plan 

FY 2008 

Actual 

FY 

2009 

FY 

2010 

Investment advisers N/A 14% 13% 10% 14% 9% 9% 

Investment companies N/A 27% 20% 15% 23% 15% 15% 

Broker-Dealers (exams by 

SEC and SROs) N/A 49% 54% 55% 57% 55% 55% 

Goal 1: Measure 4 

Percentage of (non-sweep) exams that are concluded within 120 days 

Description: The staff conducts thousands of 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. This measure was developed in 2007 as part of the strategic planning process. FY 2005 

data are not available. 

Fiscal Year 

FY 

2005 

FY 

2006 

FY 

 2007 

FY 2008 

Plan 

FY 2008 

Actual 

FY 

2009 

FY 

2010 

Percentage N/A 83% 79% 80% 79% 80% 80% 

Goal 1: Measure 5 

Percentage of attendees at CCOutreach that rated the program as “Useful” or “Extremely Useful” in their 

compliance efforts 

Description: The CCOutreach program consists of several components that are designed to educate, inform, and 

alert chief compliance officers (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 in which CCOs participate, CCOs are given the opportunity to rate the usefulness of the information 

provided in assisting them in their compliance efforts. This measure was developed in 2007 as part of the strategic 

planning process. FY 2005 data are not available. 

Fiscal Year 

FY 

2005 

FY 

2006 

FY 

 2007 

FY 2008 

Plan 

FY 2008 

Actual 

FY 

2009 

FY 

2010 

Percentage N/A 95% 97% 85% 92% 90% 92% 

- 12 -
Goal 1: Indicator 1 

Percentage of exams with “significant” findings 

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

more technical in nature, such as failing to include all information that is required to be in a record. 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 indicator was 

implemented in FY 2005 and the staff expects to continue to refine the factors that are used to measure the 

significance of examination findings. This 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. 

Fiscal Year FY 2005 FY 2006 FY 2007 FY 2008 

Fund/Adviser Exams 37% 39% 35% 38% 

Broker-Dealer Exams 48% 40% 37% 42% 

Outcome 1.2: Violations of federal securities laws are investigated and appropriately 

sanctioned. 

Enforcement Program: The highest priority of the Division of Enforcement is responding 

to the current financial crisis, focusing on areas most at risk for fraud, and providing aid to 

harmed investors. In FY 2010, the division expects to handle about 490,000 investor 

complaints, tips, and forwarded e-mail spam and plans to continue improving its 

approaches to processing and pursuing these leads. The staff expects to open about 1,330 

matters under inquiry (MUIs) and 785 investigations to determine if there is sufficient 

evidence of a securities law violation. Some of the MUIs and investigations may lead to 

the Commission filing and/or referring cases to the Department of Justice; the staff will 

close any that do not. 

During its investigations, the division aims to gather all available evidence. In FY 2010, 

the division plans to invest in enhanced technologies that are similar to those used by the 

law firms it faces during investigations and litigation. In particular, the division plans to 

focus an increased amount of resources on forensic analysis of data produced in the course 

of its investigations. 

The staff continually strives to balance the need for complete, effective, and fair 

investigations with the need for timely filing of enforcement actions against individuals 

and companies who violate securities laws. The division also moves to close an 

investigation quickly upon determining that no violations occurred. In FY 2008, the 

division closed a significant number of cases compared to prior years. The agency 

anticipates that the percentage of first enforcement cases filed within two years will remain 

at about 60 percent, the same as in FY 2009 (Measure 6). This percentage is dependent on 

the types of cases brought, as well as the time needed for other priorities such as litigating 

actions already filed. 

Enforcement expects to meet the goal of no category exceeding 40 percent of the total 

amount of cases brought in FY 2010 (Measure 7), in order to continue maintaining an 

effective distribution of cases across core enforcement areas. Enforcement expects 

- 13 -
 

financial disclosure cases to continue to be the largest category of cases in FY 2009 and 

FY 2010. 

Indicator 2 provides detail on the number of cases filed during the fiscal year, as well as 

the number of investigations opened and closed. Although it is useful for understanding 

the staff’s activities, it should not be considered a measure with annual targets. Rather 

than aiming to achieve predetermined numerical targets, the division evaluates the 

evidence as presented in each instance. 

The staff strives to resolve successfully as many cases as possible and expects the 

percentage of enforcement cases successfully resolved in FY 2010 to be 90 percent 

(Measure 8). A continued high success ratio depends on numerous factors, including the 

complexity of cases and the extent to which parties contest actions. While achieving this 

strong track record, the staff continues to pursue cases that are large, difficult, or 

precedent-setting. The division plans to continue committing resources to protracted 

litigation in FY 2010 and seeking significantly more emergency relief to freeze assets and 

halt market manipulations. 

The agency works to secure the payment of any penalties or disgorgements ordered in its 

cases. Under the Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley Act), the SEC can use Fair 

Funds to redirect penalties collected from securities law violators to the victims of their 

wrongdoing. The SEC is committed to distributing penalties and disgorgement monies 

effectively and efficiently to injured investors. In FY 2008, the agency first established a 

baseline for the percentage of debts where a payment has been made or collection has been 

initiated shortly after the payment due date (Measure 9). The 88 percent level achieved in 

FY 2008 demonstrates that the SEC and other entities involved are following procedures to 

collect penalties and disgorgements ordered, and the agency expects to achieve 

incremental improvement in this performance measure in FY 2009 and FY 2010. 

Distribution of collected penalties and disgorgements is a complex process that is difficult 

to measure. Measure 10 is currently under review and may be adjusted in the future; as a 

result data is not available for FY 2008 or FY 2009. 

The Office of International Affairs (OIA) assists the Division of Enforcement by seeking 

the assistance of foreign authorities, including freezing and repatriating assets obtained in 

violation of U.S. securities laws and transferred abroad. In FY 2008, approximately $18 

million of such assets were frozen abroad, and although future estimates for the amount of 

frozen assets cannot be projected, OIA’s efforts in this area will likely increase as 

international cooperation on enforcement matters continues to develop (Indicator 3). In 

FY 2010, OIA plans to seek the assistance of foreign authorities in approximately 650 

matters on behalf of the enforcement program. 

OIA also facilitates and uses arrangements with the SEC’s foreign counterparts to increase 

international enforcement cooperation. The staff works with the International 

Organization of Securities Commissions (IOSCO) to achieve the goal of having all IOSCO 

jurisdictions be accepted as signatories to IOSCO’s Multilateral Memorandum of 

Understanding for Enforcement Cooperation (MMOU), or express a commitment to seek 

- 14 -
 

 

 

 

 

 

 

 

 

 

legal authority to become signatories. The agency will participate in a record number of 

new applications by IOSCO members, with the goal of 25 additional signatories in FY 

2009 and a total of 74 MMOU signatories by the end of FY 2010. 

Goal 1: Measure 6 

Percentage of first enforcement cases filed within two years 

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

an investigation or inquiry. In conducting investigations, the Division of Enforcement continually strives to 

balance the need for complete, effective, and fair investigations with the need to file enforcement actions in as 

timely a manner as possible. 

Fiscal Year 

FY 

2005 

FY 

 2006 

FY 

2007 

FY 2008 

Plan 

FY 2008 

Actual 

FY 

2009 

FY 

2010 

Percentage 65% 64% 54% 60% 62% 60% 60% 

Goal 1: Measure 7 

Maintaining an effective distribution of cases across core enforcement areas 

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

across all core enforcement program areas. The mix and types of cases vary from year to year based upon the 

conditions of the markets and changes in financial instruments being used. The SEC’s enforcement program 

seeks to maintain a presence and depth so that no single area dominates its case mix, nor is underrepresented. 

Percentage of Cases by Core Enforcement Program Area and Fiscal Year 

Fiscal Year 

FY 

2005 

FY 

2006 

FY 

2007 

FY 2008 

Plan 

FY 2008 

Actual 

FY 

2009 

FY 

2010 

Financial Disclosure 29% 24% 33% <40% 23% <40% <40% 

Investment Advisers and 

Investment Companies 16% 16% 12% <40% 13% <40% <40% 

Broker-Dealers 15% 13% 14% <40% 9% <40% <40% 

Securities Offerings 9% 11% 10% <40% 18% <40% <40% 

Insider Trading 8% 8% 7% <40% 9% <40% <40% 

Market Manipulation 7% 5% 5% <40% 8% <40% <40% 

Delinquent Filings -- 16% 8% <40% 16% <40% <40% 

Other 16% 7% 11% <40% 4% <40% <40% 

Total 100% 100% 100% 100% 100% 100% 100% 

Goal 1: Measure 8 

Percentage of enforcement cases successfully resolved 

Description: 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 precedentsetting 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. (Percentages for FY 2005-FY 2006 have been recalculated to reflect a change in 

categorization; consequently, these numbers are slightly lower than those reported previously.) 

Fiscal Year 

FY 

2005 

FY 

2006 

FY 

2007 

FY 2008 

Plan 

FY 2008 

Actual 

FY 

2009 

FY 

2010 

Percentage 91% 94% 92% 85% 92% 90% 90% 

- 15 -
 

 

Goal 1: Measure 9 

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 

Description: 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. This measure was developed in 

2007 as part of the strategic planning process. Prior year data are not available. 

Fiscal Year 

FY 

2005 

FY 

 2006 

FY 

2007 

FY 2008 

Plan 

FY 2008 

Actual 

FY 

2009 

FY 

2010 

Percentage N/A N/A N/A 70% 88% 90% 90% 

Goal 1: Measure 10 

Percentage of Fair Funds and disgorgement dollars designated for distribution that are distributed to 

investors within 12 months 

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

money obtained through wrongdoing. The Commission also is empowered to seek civil penalties for violations of 

the securities laws. Where appropriate, the Commission has sought to return disgorged funds to harmed investors 

and, as a result of the Fair Funds provision of the Sarbanes-Oxley Act, to use amounts paid as penalties to reduce 

losses to injured parties. The Commission seeks to return money to wronged investors as quickly as possible. This 

measure was developed in 2007 as part of the strategic planning process. Prior year data are not available. This 

measure is currently under review and may be adjusted in the future. As a result, no data was available for FY 

2008, nor is any projected for FY 2009 and 2010. 

Fiscal Year 

FY 

2005 

FY 

 2006 

FY 

2007 

FY 2008 

Plan 

FY 2008 

Actual 

FY 

2009 

FY 

2010 

Percentage N/A N/A N/A 55% N/A N/A N/A 

Goal 1: Indicator 2 

Volume of enforcement activity: investigations opened, cases filed, and investigations closed 

Description: The volume of enforcement activity depends on a variety of factors, including the incidence of 

wrongdoing in a given fiscal year, the amount of staff resources available, and the timeframes imposed in court 

proceedings. This indicator captures the number of investigations and cases opened in a given fiscal year, as well 

as the number of investigations closed. An investigation may be closed without an enforcement action, because of 

a number of factors including insufficient evidence. An investigation also may be closed when all related cases 

have been adjudicated and all related penalties and disgorgements have been collected and dispersed, including to 

injured investors. This 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. 

Fiscal Year 

FY 

2005 

FY 

2006 

FY 

2007 

FY 2008 

Actual 

Investigations pending as of beginning of fiscal year* 3,770 4,097 4,146 4,545 

Investigations opened 947 914 776 890 

Cases filed 630 574 656 671 

Investigations closed 625 868 374 1,355 

*The number of investigations pending at the beginning of the fiscal year may change from previously reported 

numbers due to investigations being reopened or because of delays in entering closed investigations in the case 

management system. 

- 16 -
Goal 1: Indicator 3 

Assets frozen abroad in SEC cases through coordination with foreign regulators 

Description: In order to effectively enforce compliance with federal securities laws and in support of enforcement 

cases filed domestically, the SEC works closely with foreign regulators, law enforcement agencies, and courts on 

SEC cases to locate ill-gotten proceeds that have been transferred overseas and freeze the accounts in which they 

are located. The SEC works to freeze such assets so that violators cannot benefit from their wrongdoing. This 

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. 

Fiscal Year FY 2005 FY 2006 FY 2007 FY 2008 

Assets Frozen Abroad (in millions) $15.3 $20.7 $11.0 $18.0 

- 17 -
 

 

 

 

Goal 2: Promote Healthy Capital Markets 

The Commission seeks to sustain an effective and fair regulatory environment that will 

protect investors and facilitate capital formation, innovation, and competition to ensure that 

the U.S. economy can grow and create jobs. In FY 2010, the agency will consider 

regulatory proposals that address securities firm supervision, money market and mutual 

fund oversight, and corporate governance and disclosure. The agency plans to devote 

approximately $97 million and 322 permanent FTE to achieve this goal. 

Chart 4 

FY 2010 Request (Permanent FTE) FY 2010 Request ($ in thousands) 

322 Total FTE $96,932 Total Cost 

Agency Direction & Administrative Support Agency Direction & Administrative Support (6%) 

(5%) Corporation Finance Corporation Finance
 Other Program Other Program (19%) (17%) 

Offices (19%) Offices (20%) 

General General 

Counsel (6%) Counsel (6%) 

Investment Management Trading and Markets Investment Trading and 

(21%) (30%) Management (23%) Markets (28%) 

Outcome 2.1: Unnecessary impediments to capital formation are eliminated, and 

industry efforts to provide innovative and competitive products and trading 

platforms are supported. 

Securities Firm and Market Supervision: In FY 2010, the Division of Trading and Markets 

(TM) will continue to work with the FINRA to consolidate and revise SRO rules 

governing securities firms. TM will focus on rulemaking related to short sales of 

securities, manipulation, privacy, broker-dealer registration, and financial responsibility. 

The division also will examine appropriate ways to address the globalization of the 

securities markets, and continue to work with other regulators and industry personnel to 

devise and implement the most effective and efficient regulatory structure to address risk 

in the credit default swaps market. 

The division strives to review and close SRO rule filings in less than 60 days from the 

filing date, but success in achieving this goal is somewhat dependent upon the complexity 

of the proposed rule changes submitted in a given year (Measure 1). In FY 2008, TM 

closed 86 percent of filings in this time frame, a high rate attributable to the staff’s 

increased efficiency and experience in addressing the rule filings. While TM expects to 

receive more filings in FY 2010 than in previous years, the staff plans to complete more 

reviews and has increased its targets for FY 2009 and FY 2010 accordingly. 

- 18 -
Although the agency is not directly responsible for the growth of the capital markets, it 

makes every effort, as their principal regulator, to promote investor confidence, fair and 

orderly markets, and efficient capital formation. Measures 2, 3, and 4 reflect the capacity 

of the markets to handle high volumes of daily trading, settlements, and interruptions to 

trading. TM expects the New York Stock Exchange’s (NYSE) average daily volume to be 

1.8 billion shares in FY 2009, about 200 million higher than in prior years, due to the 

volatility of the markets since October 2008. However, the estimated average daily 

volume for the NYSE in FY 2010 is 1.6 billion shares, while the Nasdaq’s estimate is 2.4 

billion shares, reflecting the trend toward increased trading on fully electronic exchanges 

(Measure 2). Additionally, TM expects 98 percent of transaction dollars to be settled on 

time, continuing the trend of consistent timely settlement (Measure 3), and expects 96 

percent of all market outages to be corrected in less than 24 hours (Measure 4). 

Investment Management Regulation: The top strategic priority for the Division of 

Investment Management (IM) in FY 2010 is to enhance the standards applicable to money 

market funds to bolster their resiliency as a cash management vehicle for both retail and 

institutional investors. In the wake of recent Ponzi schemes and other investment adviser 

abuses, the staff is preparing strong new measures to assure the safekeeping of investor 

assets. In addition, IM will focus on implementing new reader-friendly “summary 

prospectus,” which empowers investors through enhanced use of technology to search for 

the specific mutual fund information of interest to them, rather than wading through 

multiple pages of traditional technical jargon and legal language. 

As a measure reflecting effectiveness of investment companies as a vehicle for capital 

formation, the division tracks equity portfolio holdings of investment companies as a 

percentage of total stock market capitalization. In recent years this measure has risen at a 

pace above its long term trend, reaching a peak of 28.9 percent in FY 2008 (Measure 5). 

Unsettled financial markets, economic recession, and withdrawals of money from mutual 

funds may cause the measure to decline toward trend (22.8 percent for FY 2009, based on 

a rolling ten-year average). 

Disclosure: In FY 2010, the Division of Corporation Finance (CF) will continue 

recommending changes to the rules relating to corporate governance. The division will 

continue to address issues, and recommend action to the Commission where needed, 

relating to disclosure of executive compensation, and will continue its work on interactive 

data required to be filed with company disclosure documents. 

Accounting Policy: In FY 2010, the Office of Chief Accountant (OCA) will continue to 

oversee the Financial Accounting Standards Board’s (FASB) accounting standard setting 

activities, including ongoing major projects on revenue recognition, financial statement 

presentation, and lease accounting. OCA will continue to evaluate the report of the SEC’s 

Advisory Committee on Improvements in Financial Reporting and to develop 

recommendations for Commission action as appropriate. OCA also will continue to 

monitor the FASB’s implementation of a more principles-based approach to setting 

accounting standards. 

- 19 -
 

 

Goal 2: Measure 1 

Percentage of SRO rule filings closed in less than 60 days from filing 

Description: The SEC reviews SRO rule proposals for consistency with investor protection and market operation 

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

and the Municipal Securities Rulemaking Board. This measure gauges the how quickly the SEC completes these 

reviews after each amendment is filed by the SRO. 

Fiscal Year 

FY 

2005 

FY 

2006 

FY 

2007 

FY 2008 

Plan 

FY 2008 

Actual 

FY 

2009 

FY 

2010 

Percentage 80% 84% 82% 75% 86% 78% 78% 

Goal 2: Measure 2 

Average daily share volume (in billions of shares) on the New York Stock Exchange (NYSE) and Nasdaq 

exchanges 

Description: The average daily share volume (in billions of shares) is indicative of whether the markets have 

sufficient capacity to be able to handle effectively and efficiently the volume of message traffic that is directed to 

those markets. The source for the data is Bloomberg. 

Fiscal Year 

FY 

2005 

FY 

2006 

FY 

 2007 

FY 2008 

Plan 

FY 2008 

Actual 

FY 

2009 

FY 

2010 

NYSE 1.6 1.7 1.6 1.7 1.6 1.8 1.6 

Nasdaq 2.0 2.1 1.7 2.3 2.3 2.4 2.4 

Goal 2: Measure 3 

Percentage of transaction dollars settled on time each year 

Description: Efficient and timely settlement of securities transactions is indicative of a fair and orderly market. The 

percentage of dollar value of transactions settled on time indicates that the relative value of unsettled transactions is 

decreasing compared to the increasing value of transactions. The source of the data is The Depository Trust & 

Clearing Corporation’s Annual Reports. 

Fiscal Year 

FY 

2005 

FY 

2006 

FY 

 2007 

FY 2008 

Plan 

FY 2008 

Actual 

FY 

2009 

FY 

2010 

Percentage 98% 98% N/A 98% 99% 98% 98% 

Goal 2: Measure 4 

Percentage of market outages at SROs and Electronic Communications Networks that are corrected within 

targeted timeframes 

Description: 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 measure gauges how quickly outages are resolved, so 

that market activity can resume. This measure was developed in 2007 as part of the strategic planning process. Prior 

year data are not available. 

Fiscal Year 

FY 

2005 

FY 

2006 

FY 

 2007 

FY 2008 

Plan 

FY 2008 

Actual 

FY 

2009 

FY 

2010 

Within 2 hours N/A N/A 81% 60% 84% 60% 60% 

Within 4 hours N/A N/A 91% 75% 96% 75% 75% 

Within 24 hours N/A N/A 100% 96% 100% 96% 96% 

- 20 -
 

Goal 2: Measure 5 

Equity portfolio holdings of U.S. investment companies as a percentage of total U.S. stock market 

capitalization 

Description: This measure may reflect, among other things, the effectiveness of investment companies as a vehicle 

for capital formation. Other factors that may influence short and long term changes in this metric include bull and 

bear markets, technological changes, investor perceptions of industry ethical standards, investor reaction to industry 

marketing efforts, and competition from other financial products/services. The future-year targets for this measure 

are calculated based on a rolling ten-year average. 

Fiscal Year 

FY 

2005 

FY 

2006 

FY 

2007 

FY 2008 

Plan 

FY 2008 

Actual 

FY 

2009 

FY 

2010 

Percentage 23.0% 24.7% 26.4% 21.6% 28.9% 22.3% 23.9% 

Goal 2: Indicator 1 

Number of new foreign private issuers and dollar amount of registered securities 

Description: The number of foreign companies registering securities in the United States and the amount of money 

they bring to the public markets can be viewed as an indicator of the integrity, liquidity, and fairness of the U.S. 

markets. This 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. 

FY 

2005 

FY 

2006 

FY 

2007 

FY 

2008 

Companies 74 60 77 64 

Dollar Value (in 

billions) $250 $109 $121 $130 

Outcome 2.2: Investors are protected through rules and regulations that promote 

high quality financial reporting standards worldwide, prevent abusive practices in 

the investment management industry, and maintain fair and financially sound 

markets. 

Securities Firm and Market Supervision: The agency plays a key role in protecting the 

stability and ensuring the resilience of the U.S. financial system. TM will continue to lead 

interagency efforts to establish specific policies and procedures for regulated entities to 

follow in the event of various disaster scenarios. In FY 2009 and FY 2010, TM expects 

that all entities will continue to meet the established objectives for sound practices that are 

focused on minimizing the effects of wide-scale market disruption, and that 95 percent of 

entities will be fully compliant with the SEC’s policy guidance regarding continuity 

planning and geographic diversity of trading sites (Measure 6). 

TM, IM, and CF devote a large share of their resources responding to no-action letters and 

interpretive and other requests from regulated entities. Although each division has 

separate processes and benchmarks for their responses (Measure 7), the agency is 

committed to speeding the approval of such requests. In FY 2008, TM responded to 63 

percent of all requests within 60 days, well below its target of 85 percent, primarily due to 

increasingly complex requests requiring additional time to process. TM anticipates 

complex requests to continue in FY 2009 and FY 2010, including issues relating to 

Nasdaq’s New Options Market. As a result, TM anticipates not meeting its desired target. 

- 21 -
In FY 2008, CF completed 100 percent of initial comments on shareholder proposals by 

the company’s planned proxy mailing date, and the division plans to continue meeting this 

target. While CF completed only 64 percent of initial comments on no-action letters 

within 30 days in FY 2008, continuing a steady decline since FY 2006, the division still 

plans to meet a 90 percent target in FY 2009 and FY 2010. CF plans to assign additional 

staff to this function and improve work processes, but meeting this target also is dependent 

on the volume and complexity of the no-action letters. The same is true for requests to IM, 

and although IM reviewed nearly all no-action letters and interpretive requests within three 

weeks of receipt in FY 2008, the division plans to maintain its target at 75 percent for FY 

2009 and FY 2010. IM also expects to meet its future goals for timely review of 

exemptive application requests. 

Monitoring the Investment Management Industry: While other factors contribute to 

investor confidence in the market, Measures 8, 9, and 10 gauge the SEC’s efforts in 

sustaining a regulatory structure that supports investor protection, investor confidence, and 

industry innovation. Targets for these measures are derived from averages for a base 

period. The proportion of U.S. households owning mutual funds is expected to remain 

stable in FY 2009 and FY 2010, reflecting uncertain market conditions and competition 

from Exchange-traded Funds (ETFs), separately managed accounts, and hedge funds 

(Measure 8). Mutual funds’ share of total retirement assets are expected to remain about 

23 percent in FY 2009 and FY 2010, reflecting, among, other things, increased popularity 

among 401(K) plan sponsors of collective investment trusts (Measure 9). 

International Policy: In order to sustain an effective and flexible regulatory environment in 

the face of increasingly global financial markets, OIA works with many securities 

regulators and international organizations to promote comprehensive transparency and 

disclosure, strengthen the supervision of global firms and markets, and reinforce high 

quality regulatory standards. In FY 2010, OIA will continue its efforts to maintain and 

expand information sharing arrangements with foreign regulators responsible for oversight 

of the world’s largest stock markets. 

- 22 -
 

 

Goal 2: Measure 6 

Percentage of regulated entities representing a single point of failure that meet the continuity of 

operations standards of the White Paper, the Policy Statement, and the Automated Review Program 

Description: In 2003, SEC and several other agencies jointly published the Interagency Paper on Sound 

Practices to Strengthen the Resilience of the U.S. Financial System (White Paper). It identifies sound practices 

to ensure the resilience of the U.S. financial system with a focus on minimizing the immediate system effects of 

a wide-scale disruption on critical financial markets. Subsequent to the release of the White Paper, the agency 

issued a policy statement, Business Continuity Planning for Trading Markets, which sets forth the 

Commission’s view that self-regulatory organizations operating trading markets and electronic communications 

networks should apply certain sound practices in their business continuity planning, specifically, that backup 

trading sites require geographic diversity and their operation should not be impaired by a wide-scale 

evacuation. A concern is that the failure of any one entity to adopt the sound practices would represent a single 

point of failure that could prevent trading in its securities in another venue, thus undermining the fairness and 

efficiency of the markets. This measure was developed in 2007 as part of the strategic planning process. Prior 

year data are not available. 

Fiscal Year 

FY 

2005 

FY 

2006 

FY 

2007 

FY 2008 

Plan 

FY 2008 

Actual 

FY 

2009 

FY 

2010 

White Paper analysis N/A N/A 99.9% 100% 100% 100% 100% 

Policy Statement analysis N/A N/A 88% 100% 88% 95% 95% 

- 23 -
 

 

 

 

 

 

Goal 2: Measure 7 

Timeliness of SEC responses to written no-action letter, exemptive, and interpretive requests 

Description: The SEC staff responds to requests for guidance from individuals and companies about specific 

provisions of the federal securities laws. These queries may be for proper interpretation 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 Division of Trading and Markets (TM), the Division of Investment 

Management (IM), and the Division of Corporation Finance (CF) are issuing initial comments on these requests 

on a timely basis. This measure was developed in 2007 as part of the strategic planning process. Prior year data 

for exemptive applications processed by IM are not available. 

Fiscal Year 

FY 

2005 

FY 

2006 

FY 

2007 

FY 2008 

Plan 

FY 2008 

Actual 

FY 

2009 

FY 

2010 

Trading and Markets: No-action letters, exemptive and interpretive requests (combined figure) 

Percentage 92% 86% 91% 85% 63% 70% 70% 

Target: Complete 85 percent of all responses within 60 days. 

Investment Management 

No-action letters and 

interpretive requests 78% 76% 91% 75% 98% 75% 75% 

Exemptive applications N/A N/A N/A 80% 81% 80% 80% 

Target: Provide initial comments on at least 75 percent of interpretive and no action requests within three weeks 

of receipt of the letter request, and initial comments on at least 80 percent of exemptive applications within 120 

days after receipt of an application. 

Corporation Finance 

No-action letters and 

interpretive requests (1) 50% 65% 66% 90% 66% 90% 90% 

Shareholder proposals (2) 100% 100% 100% 100% 100% 100% 100% 

Target: Complete 90 percent of initial comments on no-action letters within 30 days and 100 percent of initial 

comments on shareholder proposals by the company’s planned proxy mailing date. 

Goal 2: Measure 8 

Percentage of U.S. households owning mutual fund shares 

Description: The percentage of U.S. households that own mutual fund shares may reflect, among other things, 

the extent to which the regulatory regime allows for industry innovation and fosters investor confidence. Other 

factors that may influence short and long term changes in this metric include bull and bear markets, 

technological changes, investor perceptions of industry ethical standards, investor reaction to industry marketing 

efforts, and competition from other financial products/services. The future year targets for this measure are 

calculated based on a rolling ten-year average. 

Fiscal Year 

FY 

2005 

FY 

2006 

FY 

2007 

FY 2008 

Plan 

FY 2008 

Actual 

FY 

2009 

FY 

2010 

Percentage 42.7% 43.0% 43.6% 43.6% 43.6% 43.6% 43.8% 

- 24 -
 

Goal 2: Measure 9 

Percentage of U.S. households investing in the securities market either through direct share ownership or 

ownership of mutual funds 

Description: The percentage and number of households that invest in the securities market reflects, among other 

things, the extent to which the regulatory regime provides a fair, orderly, and efficient market while fostering 

investor protection and confidence in the markets. The source of this data is the Investment Company Institute 

and the Securities Industry and Financial Markets Association’s reports entitled “Equity Ownership in America,” 

which are available once every three years. Targets are updated every three years and use a base period of 1983-

1995. 

Fiscal Year 

FY 

2005 

FY 

2006 

FY 

 2007 

FY 2008 

Plan 

FY 2008 

Actual 

FY 

2009 

FY 

2010 

Percentage 50.3% N/A N/A 50.8% 

Data not yet 

available N/A N/A 

Goal 2: Measure 10 

Mutual fund share of total retirement assets 

Description: This measure reflects, among other things, investor confidence in mutual funds and a flexible 

regulatory scheme that allows funds to successfully compete in the market with other financial institutions. Other 

factors that may influence short and long term changes in this metric include bull and bear markets, technological 

changes, investor perceptions of industry ethical standards, investor reaction to industry marketing efforts, 

competition from other financial products and services, changes in tax law, legislation or rule changes that affect 

retirement accounts, and the pending transition of baby boom generation retirement investments from the 

accumulation phase to the distribution phase. The future year targets for this measure are calculated based on 

a rolling ten-year average. 

Fiscal Year 

FY 

2005 

FY 

2006 

FY 

2007 

FY 2008 

Plan 

FY 2008 

Actual 

FY 

2009 

FY 

2010 

Percentage 22.3% 23.2% 24.7% 22.0% 26.0% 22.7% 23.1% 

- 25 -
 

 

 

Goal 3: Foster Informed Investment Decision Making 

The financial markets work best when investors are fully informed, and an educated 

investing public ultimately provides the best defense against fraud and costly mistakes. 

The agency works to promote informed investment decisions through two main 

approaches. The first is reviewing disclosures of companies and mutual funds to enhance 

the clarity, completeness, and accuracy of the information that is available to investors. 

The second is developing programs to equip individual investors with tools to understand 

and analyze the market information they receive. The agency plans to devote 

approximately $173 million and 633 permanent FTE to achieve this goal. 

Chart 5 

FY 2010 Request (Permanent FTE) FY 2010 Request ($ in thousands) 

633 Total FTE $173,122 Total Cost 

Other Program Other Program Agency Direction Agency Direction & Offices (11%) Offices (11%) & Administrative Support Administrative Support (8%) (9%) General 

General Counsel (1%) Counsel (1%) 

Investment
 

Management (8%) Investment 

Management (9%) 

Trading and Trading and Corporation Corporation Markets (8%) Markets (8%) Finance (63%) Finance (63%) 

Outcome 3.1: Investors have accurate, adequate, and timely public access to 

disclosure materials that are useful, and can be easily understood and analyzed 

across companies, industries, or funds. 

Disclosure: As part of its disclosure program, the agency requires issuers to disclose 

material financial and other information to the public. These disclosures form a common 

pool of knowledge that all investors can use to judge for themselves if a security is a good 

investment. The Divisions of CF and IM expect to continue meeting the requirements of 

the Sarbanes-Oxley Act by reviewing the disclosures of about 33 percent of all reporting 

companies and investment company portfolios each year (Measure 1). This volume of 

disclosure reviews is expected to help deter fraud in public securities transactions and help 

ensure that investors receive relevant information about emerging and novel issues. 

In addition to reviewing the filings of reporting companies, CF expects to continue to issue 

initial comments on 1933 and 1934 Act registration statements and transactional filings 

within its target goal of 30 days of filing (Measure 2). The average time to issue initial 

comments has decreased over the past two years. IM aims to provide comments within 

timeliness goals for at least 85 percent of initial registration statements, 90 percent of posteffective amendments, and 99 percent of preliminary proxy statements in FY 2009 and FY 

- 26 -
 

 

 

2010 (Measure 3). These targets are consistent with past years’ targets, though IM far 

exceeded the planned levels in FY 2008. 

The SEC requires that almost all disclosure documents be filed electronically, and the 

agency posts the majority of filings immediately on the SEC’s website, www.sec.gov. 

This provides investors timely access to material information on which to base their 

investment decisions. In FY 2010, the agency plans to continue increasing the percentage 

of forms and submissions in structured formats, and expects to receive and/or convert 90 

percent of all filings and submissions into electronic format readily accessible to the public 

(Measure 4). The agency also expects to use interactive data to revise and simplify the 

filings of corporate issuers and mutual funds. 

The agency will continue upgrading the Electronic Data Gathering, Analysis and Retrieval 

(EDGAR) system to handle filings that contain interactive data, redesigning EDGAR’s 

internal processes for reviewing corporate filings. The revised processes will allow agency 

staff to target their reviews more effectively based on risk and further improve their 

internal work processes and productivity. As Measure 5 illustrates, the number of searches 

for filings on the SEC’s website is expected to increase about 18 percent in FY 2009 and 

another 15 percent in FY 2010 to 891 million searches. The agency anticipates the 

dramatic increase in demand with the full impact of the interactive data and full-text search 

initiatives, which make the information more user-friendly for investors. (These estimates 

take into account a change in methodology for computing out-year targets, which explains 

the difference between the planned and actual number of searches in FY 2008.) 

Goal 3: Measure 1 

Percentage of Exchange Act reporting companies reviewed by the SEC 

Description: 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. 

Fiscal Year FY 2005 FY 2006 FY 2007 

FY 2008 

Plan 

FY 2008 

Actual FY 2009 FY 2010 

Corporations 50% 33% 36% 33% 39% 33% 33% 

Investment Company 

Portfolios 37% 36% 38% 33% 36% 33% 33% 

Goal 3: Measure 2 

Average time to issue initial comments on Securities Act filings 

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

receive initial SEC comments. Companies often build this timeframe into their plans. The 30-day timeframe is 

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

that impacts workload plans. 

Fiscal Year FY 2005 FY 2006 FY 2007 

FY 2008 

Plan 

FY 2008 

Actual FY 2009 FY 2010 

Days 26.1 days 26.2 days 25.5 days <30 days 25.2 days <30 days <30 days 

- 27 -
 

 

 

 

 

 

 

 

 

Goal 3: Measure 3 

Percentage of investment company disclosure reviews for which initial comments are completed within 

timeliness goals 

Description: 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). The SEC also aims to 

comment on post-effective amendments within 45 days and preliminary proxy statements within 10 days after 

they are filed. 

Fiscal Year FY 2005 FY 2006 FY 2007 

FY 2008 

Plan 

FY 2008 

Actual FY 2009 FY 2010 

Initial Registration 

Statements 90% 88% 87% 85% 95% 85% 85% 

Post-Effective 

Amendments 97% 96% 95% 90% 97% 90% 90% 

Preliminary Proxy 

Statements 100% 99% 99% 99% 99% 99% 99% 

Goal 3: Measure 4 

Percentage of forms and submissions filed electronically and in a structured format 

Description: The SEC continues to emphasize electronic filing to make information available to the public in a 

format that can be easily obtained and analyzed. The SEC currently has over 100 forms that must be filed with the 

agency, which annually generate hundreds of thousands of filings with the agency. This measure identifies the 

percentage of forms that are in electronic format and the percentage of resulting filings that are received 

electronically by the SEC. In addition, the agency is redesigning its systems to allow additional forms to be filed 

using structured formats (e.g., information is captured in a comma delimited, Extensible Markup Language (XML), 

eXtensible Business Reporting Language (XBRL). This measure also gauges the percentage of forms that are 

available to be filed in a structured format and the percentage of resulting filings that are received in the structured 

format. 

Fiscal Year 

FY 

2005 

FY 

2006 

FY 

2007 

FY 2008 

Plan 

FY 2008 

Actual 

FY 

2009 

FY 

2010 

Forms 

Structured format percentage 5% 8% 8% 13% 13% 14% 14% 

Another electronic format percentage 67% 62% 62% 67% 67% 68% 68% 

Total percentage in electronic format 72% 70% 70% 80% 80% 82% 82% 

Filings Received 

Structured format percentage 35% 35% 35% 37% 37% 38% 38% 

Another electronic format percentage 54% 55% 53% 53% 53% 52% 52% 

Total percentage in electronic format 89% 90% 88% 90% 90% 90% 90% 

Goal 3: Measure 5 

Number of searches for filings on www.sec.gov 

Description: Greater availability of market-sensitive information through the SEC’s Electronic Data Gathering, 

Analysis, and Retrieval (EDGAR) system provides investors with the ability to make better-informed investment 

decisions. This measure gauges the demand for company filings through the SEC’s website (in millions). 

Fiscal Year 

FY 

2005 

FY 

2006 

FY 

2007 

FY 2008 

Plan 

FY 2008 

Actual 

FY 

2009 

FY 

2010 

Number of Searches (millions) 379 531 802 935 659 775 891 

- 28 -
Outcome 3.2: Investors have a better understanding of the operations of the nation’s 

securities markets. 

Investor Education and Outreach: Investors are and have always been the SEC’s first and 

foremost consideration. That is why the SEC is convening an Investor Advisory 

Committee, to ensure that the SEC hears views from a wide range of investors on a wide 

range of issues. In addition, the SEC works to help investors understand the basics of 

investing by issuing a wide variety of materials through its website and other outreach 

opportunities, because investors who have access to information and know what questions 

to ask are more likely to invest wisely. In FY 2010, the Office of Investor Education and 

Advocacy (OIEA) will continue to implement the SEC’s investor education program by 

using new resources in social networking and online technologies to reach individual 

investors, as well as using a direct mailing campaign in partnership with the Department of 

Treasury. Creating more methods to directly interact with individual investors will enable 

the SEC to efficiently market its initiatives and establish an effective mechanism for 

feedback from individual investors. 

In order to expand the reach of its investor education programs, OIEA focuses on cost 

efficient distribution channels. Measure 6 captures the number of investors directly 

reached by the SEC through its various communication channels, including OIEA web 

pages and printed publications, as well as the cost per thousand investors reached. OIEA 

aims to reduce the cost while maximizing the number of citizens receiving these 

communications. Over the past two years, the office has increased the number of investors 

reached by about 53 percent while reducing the average cost by about 46 percent. In FY 

2010, OIEA plans to reach a total of 14.3 million investors at a cost of about $30 per 

thousand individuals, a 59 percent increase in investors reached and nine percent decrease 

in cost compared to FY 2008. 

Investor Advocacy: OIEA also serves the tens of thousands of investors who contact the 

agency each year with investment-related complaints and questions. The staff seeks to 

provide timely and accurate responses to the public’s telephone inquiries by maintaining 

service levels that meet or exceed industry standards. The staff also strives to address and 

close complaints and inquiries as quickly as possible, though a substantial portion requires 

responses from the entities involved and take weeks to resolve. In FY 2009 and FY 2010, 

OIEA will continue to implement new operational practices, staff training, and 

replacement of its aging contact management software. 

In FY 2010, the staff plans to close 81 percent of complaints and inquiries within seven 

days and close about 92 percent within 30 days. These levels are somewhat lower than the 

estimated closure rates in FY 2009, primarily due to the changeover to a new contact 

management system (Measure 7). Over the long term, OIEA expects the operational and 

software changes will result in improved tracking of and response to investor complaints 

and inquiries, as well as trend analysis to help the agency be proactive in addressing issues. 

The changes also will help OIEA maintain low abandoned call rates and further reduce call 

wait time for investors (Measure 8). The office also is continually evaluating and updating 

- 29 -
 

 

 

 

its website content, providing investors a 24-hour resource for obtaining commonly 

requested public information. 

Freedom of Information Act (FOIA): The agency also responds to requests from investors 

and other individuals and organizations for information under FOIA. The agency has 

made a concerted effort to reduce its response times to such requests, and has focused on 

improving work processes to reduce a backlog in requests from prior years. In FY 2010, 

OIEA will remain focused on FOIA program improvement efforts, including proactively 

releasing and posting commonly requested information to the SEC website and increasing 

the availability of electronic documents. The office expects fewer FOIA requests in FY 

2009 and FY 2010 and expects to meet its targets for those years (Measure 9). 

Goal 3: Measure 6 

Demand for investor education information, and average cost per thousand investors reached 

Description: The Office of Investor Education and Advocacy (OIEA) has developed an extensive collection of 

free information to help investors understand the basics of investing, the risks and rewards of various products and 

strategies, the importance of diversification, and ways to find information about brokers, advisers, and companies. 

Much of this information is posted on the SEC’s Investor Education web page, a key tool for informing and 

educating the investing public. In addition, OIEA publishes a dozen hard-copy educational brochures. The 

General Services Administration’s Federal Citizen Information Center serves as one of the most important 

distribution channels for the SEC’s most popular English and Spanish publications. OIEA staff members also 

attend investor fairs and participate in other outreach activities, as feasible. In order to help educate the largest 

number of investors, OIEA carefully considers the costs and potential reach of its investor education programs. 

This measure has been recast to reflect investors reached and average costs based on web visits rather than web 

hits, a more accurate, industry-accepted approach. Prior year data are not available. 

Fiscal Year 

FY 

2005 

FY 

2006 

FY 

2007 

FY 2008 

Plan 

FY 2008 

Actual 

FY 

2009 

FY 

2010 

Total number of investors reached (in 

millions) N/A N/A 5.9 N/A 9.0 14.3 14.3 

Average cost per thousand investors 

reached N/A N/A $61 N/A $33 $30 $30 

Goal 3: Measure 7 

Percentage of investor complaints and inquiries completed within seven and thirty business days 

Description: OIEA serves the tens of thousands of investors who contact the SEC each year with investmentrelated complaints and questions. The staff aims to close out as many new investor assistance matters within seven 

business days. However, some complaints require responses from the entities involved and may take more than 30 

days to resolve. 

Fiscal Year 

FY 

2005 

FY 

2006 

FY 

2007 

FY 2008 

Plan 

FY 2008 

Actual 

FY 

2009 

FY 

2010 

Closed within 7 days 

Phone calls 99% 98% 98% 99% 99% 99% 99% 

Other contacts 62% 63% 64% 70% 70% 70% 67% 

Total 81% 81% 82% 85% 85% 85% 81% 

Closed within 30 days 

Phone calls 99% 99% 99% 99% 99% 99% 99% 

Other contacts 88% 88% 88% 89% 91% 95% 90% 

Total 94% 94% 94% 95% 95% 97% 92% 

- 30 -
 

 

 

Goal 3: Measure 8 

Investor assistance and public information telephone inquiries 

Description: The SEC seeks to provide the investing public with timely and accurate responses to their telephone 

inquiries by maintaining service levels that meet or exceed industry standards. This measure was developed in 

2007 as part of the strategic planning process. Prior year data are not available. 

Fiscal Year 

FY 

2005 

FY 

2006 

FY 

2007 

FY 2008 

Plan 

FY 2008 

Actual 

FY 

2009 

FY 

2010 

Investor Assistance 

Abandoned call rate N/A N/A .93% <1% .93% <1% <1% 

Average call wait time N/A N/A 12 sec. <10 sec. 9 sec. <8 sec. <8 sec. 

Public Information 

Abandoned call rate N/A N/A 5.51% <1% .98% <1% <1% 

Average call wait time N/A N/A 33 sec. <13 sec. 13 sec. <8 sec. <8 sec. 

Goal 3: Measure 9 

Responses to Freedom of Information Act requests 

Description: The Freedom of Information Act (FOIA) establishes timeframes within which the agency must 

respond to requests for non-public information. The agency is working to improve its FOIA response time and 

reduce its pending workload through efforts such as streamlining its internal processes for handling requests and 

posting correspondence related to its disclosure reviews on the SEC website. A change to the methodology for 

how selected matters were reported in 2008 resulted from amendments to the FOIA in 2007. Figures for FY 2008 

now reflect this change. Data prior to FY 2008 were not affected by this change. 

Fiscal Year 

FY 

2005 

FY 

2006 

FY 

2007 

FY 2008 

Plan 

FY 2008 

Actual 

FY 

2009 

FY 

2010 

Pending from prior FYs * 8,520 9,915 10,648 7,080 6,945 944 444 

Received during FY 9,084 9,381 9,213 10,000 9,782 7,000 7,000 

Processed 

 From current FY 

 From prior FYs 

Total 

4,370 

3,319 

7,689 

5,389 

3,259 

8,648 

5,359 

7,424 

12,783 12,000 

8,873 

6,910 

15,783 7,500 7,200 

*The pending requests for this measure reflect initial requests and appeals. 

- 31 -
Goal 4: Maximize the Use of SEC Resources 

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

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

enhancing internal controls. In FY 2010, the SEC plans to devote approximately $109 

million and 393 permanent FTE to achieve this goal. 

Chart 6 

FY 2010 Request (Permanent FTE) 

393 Total FTE 

FY 2010 Request ($ in thousands) 

$109,217 Total Cost 

Agency Direction & Administrative Support (93%) Agency Direction & Administrative Support (92%) 

Other Program Offices General Counsel Other Program Offices General Counsel 

(1%) (6%) (2%) (6%) 

Outcome 4.1: Human capital strategies are aligned to achieve mission, goals, and 

outcomes. 

Staff Recruitment, Retention, and Training: The SEC’s employees are its most vital 

strategic resource, and the agency works hard to attract and retain a high-quality, diverse, 

and results-oriented workforce. The Office of Human Resources (OHR) supports the 

agency’s efforts by providing organizational leadership for the strategic management of the 

agency’s human capital, and is working to integrate human capital systems for candidate 

selection, personnel performance management, and employee development. In FY 2010, 

OHR will continue to implement a new pay-for-performance system for all agency staff. 

OHR also will continue to implement policies and services to improve the SEC’s total 

compensation program to achieve comparability with other federal financial regulatory 

agencies. 

These improvements should help the agency maintain high employee satisfaction and a 

low turnover rate over the long term. The agency intends to keep its turnover rate below 

eight percent in FY 2009 and FY 2010 (Measure 1). Current economic conditions will 

contribute to an anticipated low rate, as fewer employees are likely to choose to retire or to 

leave the SEC for the private sector. The agency also seeks to maintain its position as one 

of the top places to work in the federal government (Measure 2). 

- 32 -
 

Goal 4: Measure 1 

Staff turnover rate 

Description: This rate is determined by dividing the number of permanent employees that leave the agency 

during the fiscal year by the total number of permanent employees on board at the beginning of the fiscal year. 

(Percentages for FY 2005-FY 2007 have been recalculated to reflect a change in methodology. Term employees 

are no longer included in the calculation because many of the agency’s term positions, such as Fellows, are 

intended to have regular turnover.) 

Fiscal Year 

FY 

2005 

FY 

2006 

FY 

2007 

FY 2008 

Plan 

FY 2008 

Actual 

FY 

2009 

FY 

2010 

Percentage 8.6% 8.9% 8.8% <8% 6.2% <8% <8% 

Goal 4: Measure 2 

Maintain a top five ranking among the Best Places to Work in Government 

Description: By offering competitive pay-for-performance and benefits systems that rival those offered by the 

private sector, the SEC aims to be an “employer of choice” in the federal government. The SEC aims to maintain 

a high ranking in this bi-annual survey conducted by the Partnership for Public Service and the Institute for the 

Study of Public Policy Implementation at American University. 

Fiscal Year FY 2005/FY 2006 

FY 2007/FY 2008 

Plan 

FY 2007/FY2008 

Actual FY 2009/FY 2010 

Ranking 

Number Ranked #5 Top Five Ranking Ranked #3 Top Five Ranking 

Outcome 4.2: Business improvements are promoted through the innovative use of 

information technology. 

Information Technology: Information technology (IT) plays a crucial role in the mission 

of the SEC. Given the size, complexity, and rapidly changing structure of the U.S. 

securities markets, the agency must leverage technology to identify and address the most 

significant threats to investors and continuously improve its productivity. 

The SEC plans to make additional investments in IT in FY 2010 in order to enhance the 

systems for handling tips, complaints, and referrals and improve the staff’s ability to 

identify emerging risks to investors. The increased funding also will allow the agency’s 

Office of Information Technology (OIT) to improve the case and exam management tools 

available to the enforcement and examination programs. 

The SEC’s public website and the EDGAR system are the agency’s two primary tools for 

disseminating useful information to investors and the financial community in a timely and 

efficient manner. As Measure 3 illustrates, OIT plans to maintain the highest levels of 

uptime and availability for the SEC’s public website and EDGAR system to ensure that the 

public and financial communities can access useful and time-sensitive disclosure 

information. 

OIT also is responsible for developing and maintaining the agency’s systems and databases 

in ways designed to protect nonpublic and confidential financial, corporate, and legal 

- 33 -
 

 

information the SEC receives and stores. The office will continue to respond to the everincreasing need for strong protection of agency data and will strive to promptly implement 

all security-related audit recommendations. In FY 2009 and FY 2010, OIT will continue 

to work toward attaining its goal of implementing all security-related audit 

recommendations within an 18 month period (Measure 4) 

Finally, OIT develops and supports the agency’s IT capital planning, project management, 

and enterprise architecture processes to maximize the effectiveness and minimize risk for 

the agency’s technology investments. The staff anticipates that all of the agency’s major 

applications and systems will meet certification and accreditation targets in FY 2009 and 

FY 2010 (Measure 5). 

Goal 4: Measure 3 

Percentage of the time that sec.gov and EDGAR are operable 

Description: The SEC is committed to disseminating useful information to investors and the financial community in 

a timely and efficient manner. The agency uses two primary tools for this purpose: its public website and the 

EDGAR system. This measure gauges the percentage of the time that these tools are operable and able to provide 

information to the public and the financial community. This measure was developed in 2007 as part of the strategic 

planning process. Prior year data are not available. 

Fiscal Year FY 2005 FY 2006 FY 2007 

FY 2008 

Plan 

FY 2008 

Actual FY 2009 FY 2010 

sec.gov 

Percentage N/A N/A 100% 100% 100% 100% 100% 

EDGAR 

Percentage N/A N/A 99% 99% 99% 99% 99% 

Goal 4: Measure 4 

Number of Inspector General and Government Accountability Office (GAO) information security-related 

recommendations outstanding for more than 18 months 

Description: The SEC is focused on establishing and maintaining sound and effective controls over the information 

systems that support the agency’s business operations. This measure gauges the timeliness of the agency’s corrective 

actions to substantially complete Inspector General and GAO recommendations related to information security. This 

measure was developed in 2007 as part of the strategic planning process. Prior year data are not available. 

Fiscal Year FY 2005 FY 2006 FY 2007 

FY 2008 

Plan 

FY 2008 

Actual FY 2009 

FY 

2010 

GAO Recommendations 

Number N/A N/A 11 2 6 0 0 

OIG Recommendations 

Number N/A N/A 5 2 2 0 0 

- 34 -
 

 

Goal 4: Measure 5 

Percentage of major systems that have been certified and accredited, and given a privacy impact assessment, 

within required timeframes 

Description: The SEC works to ensure the confidentiality and integrity of the agency’s information and systems and 

to protect the privacy of any personal information contained in those systems. This measure gauges the percentage of 

the agency’s major applications and systems that have been certified and accredited in accordance with the security 

mandates of the Federal Information Security Management Act; OMB Circular A-130, “Management of Federal 

Information Resources”; and National Institute of Standards and Technology security guidelines. In addition, this 

measure gauges the percentage of agency electronic information systems and collections that have undergone a 

privacy assessment to determine personally identifiable information and mitigate potential privacy risks, in 

accordance with the E-Government Act of 2002 and other applicable laws and regulations. This measure was 

developed in 2007 as part of the strategic planning process. Prior year data are not available. 

Fiscal Year 

FY 

2005 

FY 

 2006 

FY 

2007 

FY 2008 

Plan 

FY 2008 

Actual 

FY 

2009 

FY 

2010 

Major Systems Certified and Accredited 

Percentage N/A N/A 96% 100% 92% 100% 100% 

Major Systems with Primary Impact Assessment Completed 

Percentage N/A N/A 89% 100% 89% 100% 100% 

Outcome 4.3: Financial management and internal controls are sound. 

Audited Financial Statements and Budget/ Performance Integration: Given the SEC’s 

statutory role, taxpayers and investors alike have every right to expect that the agency 

maintains strong financial management practices and robust internal controls. The agency 

places great emphasis on bolstering its processes and systems in its budgeting, accounting, 

and internal controls functions. 

In FY 2010, the Office of Financial Management (OFM) will continue to focus on 

strengthening internal controls, developing complete and accurate financial statements, and 

increasing transparency of financial and operational information. The office plans to fully 

integrate the agency’s financial management systems and re-engineer business processes, 

as needed, to improve the effectiveness and efficiency of internal controls. Planning for 

transition to the next generation of financial, budget, and performance measurement 

applications will begin in FY 2010. OFM intends to increase the availability of 

performance and cost accounting data and to integrate financial and performance-related 

information, which will enhance management decision making and strengthen the focus on 

performance-based budgeting. 

The OFM staff strives to maintain the highest standards of financial reporting. In FY 

2010, OFM will continue to evaluate and strengthen controls, and will aim to receive an 

unqualified audit opinion on its financial statements and have no material weaknesses or 

significant deficiencies (Measure 6). 

- 35 -
Goal 4: Measure 6 

Financial audit results 

Description: Under the Accountability of Taxpayer Dollars Act of 2002, the agency is required to meet all 

proprietary accounting guidelines for federal agencies and to undergo annual audits. The SEC’s audits are 

conducted by the Government Accountability Office. In 2007, new auditing standards eliminated the term 

reportable condition and introduced new definitions for the terms “significant deficiency” and “material weakness.”

 FY 

2005 

FY 

2006 

FY 

2007 

FY 2008 

Plan 

FY 2008 

Actual 

FY 

2009 

FY 

2010 

Unqualified Opinion Yes Yes Yes Yes Yes Yes Yes 

Material Weaknesses 4 0 1 0 0 0 0 

Significant Deficiency 0 3 3 3 3 0 0 

- 36 -
 

 

 

 

 

 

Division of Enforcement 

Executive Summary 

FY 2008 FY 2009 FY 2010 

Actual Enacted Request 

FTE: Headquarters 410 434 452

 Regions 738 740 740

 Total 1,148 1,174 1,192 

Cost: Salaries and Benefits ($000) $207,847 $220,965 $240,166 

 Non-Personnel Expenses ($000) 110,139 109,167 113,280 

Total Costs ($000) $317,986 $330,132 $353,446 

FY 2010 FTE by SEC Strategic Goal 

Goal 1 Goal 2 Goal 3 Goal 4 

Enforce 

Compliance 

with Federal 

Securities Laws 

Promote Healthy 

Capital Markets 

Foster Informed 

Investment 

Decisionmaking 

Maximize the 

use of SEC 

Resources 

1,192 

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

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

and assist in criminal prosecutions. 

Intelligence Analysis: In FY 2010, the staff expects to handle about 490,000 investor 

complaints, tips, and forwarded e-mail spam and open about 1,330 matters under inquiry. 

The division also will continue improving its approaches to processing and pursuing these 

leads. 

Investigations: The division’s highest priority is responding to the current financial crisis 

and providing aid to harmed investors. The division plans to focus on areas most at risk 

for fraud or other serious violations that could harm investors, such as market manipulation 

through the circulation of false rumors, subprime lending, auction rate securities, hedge 

funds, institutional insider trading and ponzi schemes. The division plans to invest in 

enhanced technologies that are similar to those used by the law firms it faces during 

investigations and litigation. In particular, the division plans to focus an increased amount 

of resources on forensic analysis of data produced in the course of its investigation. 

Proceedings: The division will continue to commit increased resources to protracted 

litigation and seek significantly more emergency relief to freeze assets and halt market 

manipulations and ongoing frauds. 

- 37 -
 

 

 

 

 

 

 

 

Office of Compliance Inspections and Examinations 

Executive Summary 

FY 2008 FY 2009 FY 2010 

Actual Enacted Request 

FTE: IC/IA Program

 Headquarters 44 46 48

 Regions 381 406 406

 Subtotal 425 452 454

 BD/SRO Program 

 Headquarters 89 100 104

 Regions 276 276 276

 Subtotal 365 376 380

 Total 790 828 834 

Cost: Salaries and Benefits ($000) $140,961 $153,390 $165,192 

 Non-Personnel Expenses ($000) 60,387 57,434 59,421 

Total Costs ($000) $201,348 $210,824 $224,613 

FY 2010 FTE by SEC Strategic Goal 

Goal 1 Goal 2 Goal 3 Goal 4 

Enforce 

Compliance 

with Federal 

Securities Laws 

Promote Healthy 

Capital Markets 

Foster Informed 

Investment 

Decisionmaking 

Maximize the 

use of SEC 

Resources 

834 

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

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

internal compliance controls at securities firms registered with the SEC. OCIE uses riskbased methodologies to identify firms for examination and to focus resources on activities 

that could pose the greatest risk to investors and the integrity of the markets. 

In FY 2010, OCIE expects to further improve its risk-based approach by enhancing risk 

assessment and surveillance methodologies and improving training for examiners. The 

staff also will devote significant resources to detecting fraud and confirming the 

appropriate safeguarding of customer assets. In addition to examinations of regulated 

entities, the staff will continue proactive efforts to encourage improved compliance 

practices through the Chief Compliance Officer Outreach (CCOutreach) program, the use 

of “ComplianceAlerts,” and other initiatives. 

- 38 -
 

 

 

 

 

Division of Corporation Finance 

Executive Summary 

FY 2008 

Actual

FY 2009 

Enacted

FY 2010 

Request 

FTE: Headquarters 441 463 463 

Cost: Salaries and Benefits ($000) 

 Non-Personnel Expenses ($000) 

Total Costs ($000) 

$75,740 

35,318 

$111,058 

$83,388 

35,772 

$119,160 

$89,182 

 36,962 

$126,144 

FY 2010 FTE by SEC Strategic Goal 

Goal 1 Goal 2 Goal 3 Goal 4 

Enforce 

Compliance 

with Federal 

Securities Laws 

Promote Healthy 

Capital Markets 

Foster Informed 

Investment 

Decisionmaking 

Maximize the 

use of SEC 

Resources 

5 60 398 

The Division of Corporation Finance establishes disclosure requirements and monitors 

disclosure to provide investors with information necessary to make investment decisions 

and to help prevent fraud and misrepresentation in securities transactions. Continuing 

investor interest regarding the quality of financial reporting and corporate governance and 

significant changes in disclosure and other requirements applicable to reporting companies 

have contributed to a changing regulatory environment affecting the securities markets. 

Review of Filings: The division expects to complete about 3,875 reviews of reporting 

companies. This 33 percent review level will help ensure that investors receive material 

information about emerging and novel issues and deter fraud in public securities 

transactions; it also will satisfy the review requirement of the Sarbanes-Oxley Act of 2002. 

Rulemaking and Interpretive Advice: The division will continue recommending changes 

to, and monitoring compliance with, the rules relating to corporate governance issues, such 

as proxy access. The division will continue to address issues, and recommend action to the 

Commission where needed, relating to disclosure of executive compensation. It also will 

continue its work on interactive data required to be filed with company disclosure 

documents. Additional rulemaking projects will be undertaken as necessary to protect 

investors, facilitate capital formation, improve and simplify disclosure, and eliminate 

duplicative regulations. 

- 39 -
 

 

 

 

 

 Division of Trading and Markets 

Executive Summary 

FY 2008 

Actual

FY 2009 

Enacted

FY 2010 

Request 

FTE: Headquarters 167 174 182 

Cost: Salaries and Benefits ($000) 

 Non-Personnel Expenses ($000) 

Total Costs ($000) 

$29,868 

11,970 

$41,838 

$33,970 

11,841 

$45,811 

$37,881 

 12,640 

$50,521 

FY 2010 FTE by SEC Strategic Goal 

Goal 1 Goal 2 Goal 3 Goal 4 

Enforce 

Compliance 

with Federal 

Securities Laws 

Promote Healthy 

Capital Markets 

Foster Informed 

Investment 

Decisionmaking 

Maximize the 

use of SEC 

Resources 

31 98 53 

The Division of Trading and Markets’ mission is to maintain fair, honest, and efficient 

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

Commission directly regulates market participants where Commission rulemaking is the 

most effective approach and relies on the self-regulation of the securities industry in other 

instances to ensure fair dealing and investor protection. 

Securities Firm Supervision: In FY 2010, the division will continue to work with the 

Financial Industry Regulatory Authority to consolidate and revise self-regulatory 

organization rules governing securities firms. The division will review applications by 

broker-dealers to use mathematical models to calculate capital requirements and continue 

to closely monitor the risk management function at those firms. Rulemaking efforts 

related to short sales of securities, manipulation, privacy, broker-dealer registration, and 

financial responsibility will continue, and staff will address issues relating to foreign and 

domestic transfer agents. 

Market Supervision: The division will continue to supervise trading in the U.S. exchange 

and over-the-counter securities markets. In the options markets, the division will continue 

to evaluate and respond to market structure changes as a result of quoting certain options in 

pennies and the new linkage proposed by these exchanges. The division also will examine 

appropriate ways to address the globalization of the securities markets, and continue to 

work with other regulators and industry personnel to devise and implement the most 

effective and efficient regulatory structure to address risk in the credit default swaps 

market. 

- 40 -
 

 

 

 

 

 

Division of Investment Management 

Executive Summary 

FY 2008 

Actual

FY 2009 

Enacted

FY 2010 

Request 

FTE: Headquarters 149 153 154 

Cost: Salaries and Benefits ($000)

 Non-Personnel Expenses ($000) 

Total Costs ($000) 

 $27,719 

16,579 

$44,298 

$29,690 

17,234 

$46,924 

$31,966 

 18,005 

$49,971 

FY 2010 FTE by SEC Strategic Goal 

Goal 1 Goal 2 Goal 3 Goal 4 

Enforce 

Compliance 

with Federal 

Securities Laws 

Promote Healthy 

Capital Markets 

Foster Informed 

Investment 

Decisionmaking 

Maximize the 

use of SEC 

Resources 

37 69 48 

The Division of Investment Management regulates investment companies and investment 

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

Investment Advisers Act of 1940. The division seeks to protect investors from fraud, 

mismanagement, self-dealing, and inadequate disclosures by investment companies and 

investment advisers, without imposing unnecessary burdens on regulated entities. 

The division’s top strategic priority for FY 2010 is to determine whether rule 2a-7, the rule 

regulating money market funds, needs revision in light of recent market events. To protect 

investors and prevent abusive practices in the investment management industry, the staff 

plans to recommend that the Commission propose and adopt revisions to the custody rule 

for investment advisers. The staff also will focus on implementing new rules designed to 

provide mutual fund investors with more reader-friendly disclosure, to improve the 

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

including the Internet, and to require mutual funds to provide risk/return summary 

information in interactive data format. 

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

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

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

contracts, most portfolios of new unit investment trusts, and almost all proxy statements 

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

operations. 

- 41 -
 

 

 

 

 

 

 

 

 Office of the General Counsel 

Executive Summary 

FY 2008 FY 2009 FY 2010 

Actual Enacted Request 

FTE: Headquarters 121 120 122

 Regions 11 11 11

 Total 132 131 133 

Cost: Salaries and Benefits ($000) $25,550 $26,539 $28,812 

 Non-Personnel Expenses ($000) 9,027 8,730 9,084 

Total Costs ($000) $34,577 $35,269 $37,896 

FY 2010 FTE by SEC Strategic Goal 

Goal 1 Goal 2 Goal 3 Goal 4 

Enforce 

Compliance 

with Federal 

Securities Laws 

Promote Healthy 

Capital Markets 

Foster Informed 

Investment 

Decisionmaking 

Maximize the 

use of SEC 

Resources 

82 20 7 24 

The General Counsel serves as the chief legal officer of the Commission, and provides 

independent analysis and advice to the Chairman, Commissioners, and operating divisions 

in all areas of the Commission’s activities. 

In FY 2010, the Office of the General Counsel (OGC) will play a critical role in the 

agency’s work to focus significantly on addressing the current financial crisis and its 

impact on the securities markets and investor confidence. The agency’s response likely 

will involve an increased emphasis on vigorous enforcement of the securities laws, 

regulations affecting the securities markets and market participants, and legislative and 

other initiatives to reform the current regulatory structure for the securities markets and the 

financial services industry. These priorities will present numerous complex and important 

legal and policy issues, and OGC anticipates an increase in workload in FY 2010 

compared to prior fiscal years. 

- 42 -
 

 

 

 

 

 Other Program Offices 

FY 2008 FY 2009 FY 2010 

Actual Enacted Request 

FTE: Headquarters

 Office of Chief Accountant 55 54 54

 Office of Investor Education and Advocacy 65 68 68

 Office of International Affairs 30 32 32

 Office of Economic Analysis 22 26 26

 Office of Risk Assessment 3 8 10

 Office of Administrative Law Judges 9 11 11

 Total 184 199 201 

Cost: Salaries and Benefits ($000) $32,802 $36,961 $39,988 

 Non-Personnel Expenses ($000) 17,217 18,175 17,633 

Total Costs ($000) $50,019 $55,136 $57,621 

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

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

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

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

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

Office of Investor Education and Advocacy: Serves investors who complain to the SEC 

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

The SEC has significantly expanded the office’s responsibilities to ensure the views of 

retail investors inform the Commission’s regulatory policies and disclosure programs and 

to improve investors’ financial literacy. 

Office of International Affairs: Advances international regulatory and enforcement 

cooperation, promotes converged high regulatory standards worldwide, and facilitates 

technical assistance programs in foreign countries. 

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

issues associated with its regulatory activities. 

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

Office of Administrative Law Judges: Adjudicates allegations of securities law violations. 

- 43 -
 

 

 

 

 

 

Office of Chief Accountant 

Executive Summary 

FY 2008 

Actual

FY 2009 

Enacted

FY 2010 

Request 

FTE: Headquarters 55 54 54 

FY 2010 FTE by SEC Strategic Goal 

Goal 1 Goal 2 Goal 3 Goal 4 

Enforce 

Compliance 

with Federal 

Securities Laws 

Promote Healthy 

Capital Markets 

Foster Informed 

Investment 

Decisionmaking 

Maximize the 

use of SEC 

Resources 

17 27 10 

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

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

financial reporting. The office also works to improve the professional performance of 

public company auditors in order to ensure that financial statements used for investment 

decisions are presented fairly and have credibility. OCA leads the SEC’s efforts to oversee 

accounting standard setting by the Financial Accounting Standards Board (FASB) and 

auditor oversight and regulation by the Public Company Accounting Oversight Board, as 

required by the Sarbanes-Oxley Act of 2002. 

In FY 2010, OCA will continue to oversee the FASB’s accounting standard setting 

activities, including ongoing major projects on accounting for financial instruments, 

revenue recognition, off-balance sheet accounting, financial statement presentation, and 

lease accounting. The FASB is expected to be particularly active in these projects since 

the ability to complete major FASB projects by 2011 will impact the Commission’s 

proposal to move to International Financial Reporting Standards. OCA will continue to 

evaluate the report of the SEC’s Advisory Committee on Improvements in Financial 

Reporting and to develop recommendations for Commission action as appropriate. OCA 

also will continue to monitor the FASB’s implementation of a more principles-based 

approach to setting accounting standards. 

- 44 -
 

 

 

 

 

 

Office of Investor Education and Advocacy 

Executive Summary 

FY 2008 

Actual

FY 2009 

Enacted

FY 2010 

Request 

FTE: Headquarters 65 68 68 

FY 2010 FTE by SEC Strategic Goal 

Goal 1 Goal 2 Goal 3 Goal 4 

Enforce 

Compliance 

with Federal 

Securities Laws 

Promote Healthy 

Capital Markets 

Foster Informed 

Investment 

Decisionmaking 

Maximize the 

use of SEC 

Resources 

2 5 59 2 

The Office of Investor Education and Advocacy (OIEA) receives and addresses questions 

and complaints from individual investors about the securities market and industry 

participants. OIEA also handles requests for public information, and carries out the SEC’s 

Investor Education and Freedom of Information Act (FOIA) programs. OIEA’s Office of 

Policy and Advocacy provides information about investor views and concerns to the 

Commission and other Commission staff working on the regulatory and policy agenda. 

OIEA will continue to implement the SEC’s investor education program and plans to 

expand its reach to investors through direct mail, new media, and existing channels. These 

methods will aid OIEA in achieving the SEC’s goal of fostering informed investment 

decision-making. 

- 45 -
 

 

 

 

 

 

Office of International Affairs 

Executive Summary 

FY 2008 

Actual

FY 2009 

Enacted

FY 2010 

Request 

FTE: Headquarters 30 32 32 

FY 2010 FTE by SEC Strategic Goal 

Goal 1 Goal 2 Goal 3 Goal 4 

Enforce 

Compliance 

with Federal 

Securities Laws 

Promote Healthy 

Capital Markets 

Foster Informed 

Investment 

Decisionmaking 

Maximize the 

use of SEC 

Resources 

20 10 2 

The Office of International Affairs (OIA) assists the SEC in meeting its mandate by 

advancing cross-border supervisory and enforcement cooperation, advising the agency on 

developing and modernizing regulatory policy to reflect the increasingly international 

nature of securities activity, and providing technical assistance to emerging markets. 

Additionally, OIA advises the agency in promoting comprehensive transparency and 

disclosure in capital markets around the world, as well as developing mechanisms to 

coordinate the supervision of internationally-active U.S. firms. 

In FY 2010, OIA expects to continue to participate in major international regulatory policy 

initiatives to strengthen financial markets and investor protection in light of the current 

market turmoil. OIA also will work with the Division of Enforcement on numerous cases 

with significant international components. In all, OIA expects to contribute to about 440 

international initiatives to promote high regulatory standards and strengthen the global 

marketplace. 

- 46 -
 

 

 

 

 

 

Office of Economic Analysis 

Executive Summary 

FY 2008 

Actual

FY 2009 

Enacted

FY 2010 

Request 

FTE: Headquarters 22 26 26 

FY 2010 FTE by SEC Strategic Goal 

Goal 1 Goal 2 Goal 3 Goal 4 

Enforce 

Compliance 

with Federal 

Securities Laws 

Promote Healthy 

Capital Markets 

Foster Informed 

Investment 

Decisionmaking 

Maximize the 

use of SEC 

Resources 

7 15 3 1 

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

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

analyses that address the economic issues associated with the regulation of the financial 

markets and enforcement of securities laws and conveys that knowledge to those making 

decisions on Commission policy and actions. 

In FY 2010, OEA will work with the divisions to identify upcoming rulemaking projects 

with the goal of becoming involved at an early stage. This effort will ensure that economic 

and quantitative analysis will continue to become a more integral component of the 

rulemaking process. The office expects to provide support for ongoing rulemaking activity 

in areas such as short selling, possible regulation of hedge fund advisers, corporate 

governance, executive compensation, international financial accounting standards and 

proxy solicitation and shareholder voting. The staff also expects to review about 80 

Commission and Self-Regulatory Organization (SRO) rules and to conduct around 70 

regulatory flexibility analyses. 

OEA will continue to provide analytical support to Division of Enforcement staff, 

including identifying potential violations and analyzing the impact of the violations in 

terms of ill-gotten gains and harm to investors. The office also plans to help inspection 

staff develop tools to monitor broker-dealers, exchanges, and investment companies and 

advisers. In FY 2010, OEA will continue to generate economic analyses and 

accompanying statistics that help the agency enforce compliance with securities laws, 

assess regulatory alternatives, measure the impact of previous rule changes, and otherwise 

further the mission of the agency. 

- 47 -
 

 

 

 

 

 

 

Office of Risk Assessment 

Executive Summary 

FY 2008 

Actual

FY 2009 

Enacted

FY 2010 

Request 

FTE: Headquarters 3 8 10 

FY 2010 FTE by SEC Strategic Goal 

Goal 1 Goal 2 Goal 3 Goal 4 

Enforce 

Compliance 

with Federal 

Securities Laws 

Promote Healthy 

Capital Markets 

Foster Informed 

Investment 

Decisionmaking 

Maximize the 

use of SEC 

Resources 

5 1 1 3 

The Office of Risk Assessment (ORA) is responsible for identifying entities, products or 

practices within the financial markets that may pose risk to the agency’s mission of 

protecting investors; maintaining fair, orderly, and efficient markets; and facilitating 

capital formation. ORA coordinates the SEC’s risk management program and works 

closely with SEC divisions and offices on developing ways to identify, assess, and mitigate 

risks. In FY 2010, the office will continue its efforts to connect the agency’s risk 

identification and assessment function more effectively with the examination of regulated 

entities and the enforcement of the U.S. federal securities laws. 

- 48 -
 

 

 

 

 

 

 

 Office of the Administrative Law Judges 

Executive Summary 

FY 2008 

Actual

FY 2009 

Enacted

FY 2010 

Request 

FTE: Headquarters 9 11 11 

FY 2010 FTE by SEC Strategic Goal 

Goal 1 Goal 2 Goal 3 Goal 4 

Enforce 

Compliance 

with Federal 

Securities Laws 

Promote Healthy 

Capital Markets 

Foster Informed 

Investment 

Decisionmaking 

Maximize the 

use of SEC 

Resources 

11 

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

administrative law judges preside at evidentiary hearings where the Commission has 

determined that public hearings are appropriate, in the public interest, and for the 

protection of investors. The hearings are conducted in a manner similar to non-jury trials 

in the federal district courts. 

In FY 2009 and FY 2010, the administrative law judges plan to dispose of roughly 115 

proceedings and issue approximately 25 initial decisions. 

- 49 -
 

 

 

 

 

 

 

 

 

 

Agency Direction and Administrative Support 

FY 2008 FY 2009 FY 2010 

Actual Enacted Request 

FTE: Headquarters

 Agency Direction 

Office of Executive Staff 34 38 38

 Office of Public Affairs 7 8 8

 Office of the Secretary 41 41 41

 Subtotal 82 87 87

 Administrative Support 

 Office of the Executive Director 8 11 11

 Office of Financial Management 51 57 60

 Office of Human Resources 59 62 62

 Office of Administrative Services 86 90 90

 Office of Information Technology 126 127 127

 Office of Equal Emp. Opportunity 8 8 8 

Office of the Inspector General 11 16 16

 Subtotal 349 371 374

 Total 431 458 461 

Cost: Salaries and Benefits ($000) $65,880 $76,883 $84,713 

 Non-Personnel Expenses ($000) 38,309 39,861 41,075 

Total Costs ($000) $104,189 $116,744 $125,788 

This section of the FY 2010 request details the SEC’s agency-wide executive activities, 

operations, and administrative functions and covers the following areas: 

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

Legislative and Intergovernmental Affairs (OLIA), Office of Public Affairs (OPA), and 

Office of the Secretary. 

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

The Office oversees the allocation and utilization of agency resources, promotes 

management controls and financial integrity, and manages administrative support 

functions. 

Office of Information Technology: manages the Commission’s IT program including 

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

architecture. 

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

employment have equal opportunity in employment. 

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

internal investigations into allegations of misconduct by staff or contractors. 

- 50 -
 

 

 

 

 

 

Agency Direction 

Executive Summary 

FY 2008 

Actual

FY 2009 

Enacted

FY 2010 

Request 

FTE: Headquarters

 Office of Executive Staff 

Office of Public Affairs 

Office of the Secretary 

Total 

34 

7 

41 

82 

38 

8

41

87 

38

 8

 41

87 

FY 2010 FTE by SEC Strategic Goal 

Goal 1 Goal 2 Goal 3 Goal 4 

Enforce 

Compliance 

with Federal 

Securities Laws 

Promote Healthy 

Capital Markets 

Foster Informed 

Investment 

Decisionmaking 

Maximize the 

use of SEC 

Resources 

18 19 46 4 

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

of the Secretary, the Office of Legislative and Intergovernmental Affairs (OLIA), and the 

Office of Public Affairs (OPA). The Commissioners’ offices address the wide array of 

legal, financial, managerial, legislative, and economic issues encountered in the 

administration of the federal securities laws. The Office of the Secretary schedules 

Commission meetings; prepares and maintains records of Commission actions; reviews 

documents submitted to the Commission for action; and reviews and issues Commission 

orders, opinions, and releases. OLIA works with Members of Congress, executive branch 

officials, state and local officials, and their staff on issues affecting the SEC. OLIA also is 

responsible for the timely processing of all correspondence sent to the Chairman, as well as 

all congressional correspondence sent to the Commission. OPA coordinates relations with 

the media, the general public, and foreign visitors. 

In fulfilling the SEC’s mission to protect investors; maintain fair, orderly, and efficient 

markets; and facilitate capital formation, in FY 2010 the Commission anticipates holding 

about 65 meetings and considering about 500 calendar items and 650 seriatim actions, 

including enforcement actions, rule proposals, and other items related to the administration 

of the federal securities laws. 

OLIA will coordinate the preparations for 24 congressional testimonies and handle 

approximately 16,000 telephone and e-mail inquiries from congressional staff. OPA 

expects to receive about 45,000 media inquiries and draft and distribute about 310 news 

releases. 

- 51 -
 

 

 

 

 

Office of the Executive Director 

Executive Summary 

FY 2008 FY 2009 FY 2010 

Actual Enacted Request 

FTE: Headquarters

 Office of the Executive Director 8 11 11

 Office of Financial Management 51 57 60

 Office of Human Resources 59 62 62

 Office of Administrative Services 86 90 90

 Total 204 220 223 

FY 2010 FTE by SEC Strategic Goal 

Goal 1 Goal 2 Goal 3 Goal 4 

Enforce 

Compliance 

with Federal 

Securities Laws 

Promote Healthy 

Capital Markets 

Foster Informed 

Investment 

Decisionmaking 

Maximize the 

use of SEC 

Resources 

2 1 220 

The Office of the Executive Director has oversight responsibility for the Office of 

Financial Management (OFM), Office of Human Resources (OHR), and Office of 

Administrative Services (OAS). 

Financial Management: In FY 2010, OFM will continue planned efforts to fully integrate 

the agency’s financial management systems and re-engineer business processes, as needed, 

to improve the effectiveness and efficiency of internal control. The office also will begin 

planning for transition to the next generation of financial, budget, and performance 

measurement applications. Finally, OFM will work to enhance management decision 

making by integrating financial and performance-related information and making 

managerial cost accounting data available agency-wide. 

Human Resources: OHR will continue to integrate its human capital systems in FY 2010 

to improve the coordination and information flow among the different aspects of the 

agency’s human capital planning and align with Human Capital Assessment and 

Accountability Framework principles. 

Administrative Services: In FY 2010, OAS will continue to focus on automating the 

acquisition function, implementing the newly established Real Property and Leasing 

Branch and the Acquisition Policy Branch, enhancing agency emergency preparedness 

plans, and strengthening physical security practices. 

- 52 -
 

 

 

 

 

 

 

 

Office of Information Technology 

Executive Summary 

FY 2008 

Actual

FY 2009 

Enacted

FY 2010 

Request 

FTE: Headquarters 126 127 127 

FY 2010 FTE by SEC Strategic Goal 

Goal 1 Goal 2 Goal 3 Goal 4 

Enforce 

Compliance 

with Federal 

Securities Laws 

Promote Healthy 

Capital Markets 

Foster Informed 

Investment 

Decisionmaking 

Maximize the 

use of SEC 

Resources 

127 

The Office of Information Technology (OIT) supports the agency’s use of technology to 

enhance agency-wide mission performance. OIT ensures that the agency supports the 

President’s policies pertaining to information technology (IT), the Clinger-Cohen Act, and 

other elements of the federal government’s IT governance practices. 

In FY 2010, OIT will develop or integrate new enterprise capabilities and solutions that 

will improve the ability of the agency to manage tips, complaints and referrals, develop 

risk assessment tools, while continuing to leverage investments made in previous years in 

case management tools and structured filings. 

Enforcement and Examination Management: The office plans to implement a 

comprehensive system to manage tips, complaints and referrals, and improve the risk 

assessment tools and data analysis capabilities of the Commission. 

Electronic Data Gathering, Analysis and Retrieval (EDGAR) and Disclosure Management: 

OIT will lead the agency’s transition to a more modernized technical architecture for the 

EDGAR system. The agency also expects to use interactive data to revise and simplify the 

filings of corporate issuers and mutual funds. 

Internal Process Improvements and Employee Productivity: The office plans to extend 

enhancements of the agency’s financial systems and support the implementation of an 

automated procurement system. 

- 53 -
 

 

 

 

 

 

 

Office of Equal Employment Opportunity 

Executive Summary 

FY 2008 FY 2009 FY 2010 

Actual Enacted Request 

FTE: Headquarters 8 8 8 

FY 2010 FTE by SEC Strategic Goal 

Goal 1 Goal 2 Goal 3 Goal 4 

Enforce 

Compliance 

with Federal 

Securities Laws 

Promote Healthy 

Capital Markets 

Foster Informed 

Investment 

Decisionmaking 

Maximize the 

use of SEC 

Resources 

8 

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

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

status, gender, national origin, race, religion, protected genetic information, or sexual 

orientation, as well as discriminatory retaliation against individuals for participating in the 

EEO process or opposing discrimination. The EEO staff immediately and appropriately 

responds to alleged violations of EEO laws and SEC EEO policies, such as reports of 

harassing conduct. The EEO Office also is responsible for developing and executing 

diversity and inclusion initiatives both internally and externally. These initiatives are 

aimed at fostering an inclusive work environment and culture, as well as engaging 

employees in outreach activities targeting the diverse investment communities. 

In FY 2010, EEO will evaluate the effectiveness of its special emphasis programs and 

diversity and inclusion initiatives. In addition, the EEO Office will continue to collaborate 

with the Office of Human Resources (OHR), to implement numerous provisions of the 

Diversity MOU executed in January 2009 between the SEC and the National Treasury 

Employees Union. The office will improve its ability to monitor and report on EEO 

compliance activities by migrating case data from a stand-alone system to a web-based 

commercial off-the-shelf system. 

- 54 -
 

 

 

 

 

 

 

 

 Office of the Inspector General 

Executive Summary 

FY 2008 

Actual

FY 2009 

Enacted

FY 2010 

Request 

FTE: Headquarters 11 16 16 

FY 2010 FTE by SEC Strategic Goal 

Goal 1 Goal 2 Goal 3 Goal 4 

Enforce 

Compliance 

with Federal 

Securities Laws 

Promote Healthy 

Capital Markets 

Foster Informed 

Investment 

Decisionmaking 

Maximize the 

use of SEC 

Resources 

16 

The rapid pace of significant internal and external changes that affect the work of the SEC 

drives the work of the Office of the Inspector General (OIG). In FY 2010, the OIG will 

continue its focus on improving agency operations through audits and evaluations. It also 

will enhance staff and agency integrity by investigating allegations of employee and 

contractor misconduct. By conducting audits, inspections, and investigations, the OIG 

supports the efforts of Congress and the SEC to fulfill their responsibilities and achieve 

their goals and objectives with respect to oversight of the securities industry and investor 

protection. 

- 55 -