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Securities and Exchange Commission
Site Visit Report
5/13/99

An independent law enforcement agency, SEC administers and enforces federal laws regulating securities markets and exchanges, mutual funds, and corporate securities issues. SEC also oversees self-regulated entities like the NYSE and NASDAQ.

SEC has 2,800 employees and a $340 million/year budget. There is a Chairman and four other Commissioners who serve fixed terms. In Washington, DC, there are offices of corporate finance, investment management, market regulation, and compliance inspections and examinations; the largest office is enforcement. There are also five regional offices which mostly do enforcement and examinations.

SEC partners with private industry, the Department of Justice, local District Attorney's offices, and foreign governments in its enforcement offices. It also partners with academia by providing a limited number of rotation opportunities for academics.

All of SEC's performance measures measure its business results. SEC collects data at the office level. The Office of the Executive Director analyzes the data and is responsible for the strategic and annual plans. Pre-GRPA, SEC already included workload measures in its budget. The current budget has 286 measures; there are 21 in its strategic plan.

Performance results are one factor in allocating resources, along with the Chairman's priorities and what's happening on the Street. All performance measures flow back into one of SEC's three goals.

The Office of the Executive Director took the lead in developing the strategic plan, which provided a unique opportunity for the agency offices to collaborate. SEC consciously chose to focus on goals and objectives that affected external stakeholders; the next strategic plan may also focus on internal goals.

SEC's strategic goals are:

1. to protect investors,
2. to maintain fair, honest, and efficient markets, and
3. to facilitate capital formation.

A high level management task force developed these goals. Almost 90% of SEC's resources are devoted to its main goal, protecting investors.

Customers

Last year SEC's investor assistance office answered over 50,000 investor complaints and inquiries. SEC has an automated 800 number and an enforcement/complaint center website. Under its current Chairman, SEC has launched a series of town hall meetings for individual investors in collaboration with private industry on topics like investing for retirement. SEC has also held several small business roundtables. Questionnaires were filled out by town meeting participants to obtain additional feedback, and the industry has been very supportive.

SEC faces unique challenges in staffing. Attorneys make up 40 percent and accountants/financial analysts another 20 percent of the workforce. As a result of the tremendous growth in the securities industry, staff turnover is a problem. SEC has attempted a variety of quality of worklife and other strategies to reduce the loss of employees to the private sector. Although SEC's budget allocates a substantial amount for training, most training is on the job.

None.

SEC intends to distribute a pocket version of its strategic plan to its employees.

It's a struggle for law enforcement and regulatory agencies to come up with good outcome measures.