Securities and Exchange Commission’s FY 2010 Performance and Accountability Report

In June 2010, the SEC approved a new strategic plan for its fiscal years 2010 – FY 2015. The plan set out the agency’s mission, vision, values, and strategic goals. It also had a detailed list the outcomes the SEC wanted to achieve and the performance measures that will be used to gauge the agency’s progress.

The SEC has released its 2010 Performance and Accountability Report, the first to measure the SEC performance against its strategic plan.

I thought it would be useful to look at some portions of the report to see if it could offer some insight into what to expect from the SEC as real estate private equity moves into the SEC registration regime.

The first that caught my eye was GoalL 1 Measure 3: Percentage of firms receiving deficiency letters that take corrective action in response to all exam findings.

The Office of Compliance Inspections and Examinations missed its target of 95%, achieving only 90%. This was a drop from 94% in FY2009. I’m not sure what factors I would attribute to the decrease. Were the examinees less afraid of SEC action?

This is one that compliance professionals need to focus on. If the SEC identifies deficiencies, you need to fix them. Failure to fix them is a big red flag that could move the problem from OCIE to enforcement.

On the education side, the SEC’s CCOutreach program failed to meet its goal of having attendees rate the program as “useful” or “extremely useful.”

I attended a 2009 edition of CCOutreach in Boston and it was excellent. Looking back at my notes, it was a spot-on roadmap for the upcoming SEC initiatives. I still hate the name.

I think it’s worth spending some time to look through the report. I would guess that the SEC is going to step up its efforts in areas where it failed to meed the goals in its strategic plan.

That would mean more inspections, more enforcement actions. It will also mean more educational efforts and quicker resolution. One measure is the percentage of non-sweep and non-cause exams concluded in 120 days. The goal was 75%, but they only achieved 48%.


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  1. Another CCO in Trouble - November 18, 2010

    […] If the SEC tells you there is deficiency, fix it and make it a priority. The first thing they will look at on their next visit is the area of the deficiency. I'm still surprised that the SEC reported only 90% of deficiencies get cured. […]