The Securities and Exchange Commission (SEC) faces growing regulatory and oversight challenges. Technological advances have increased the complexity of securities markets and the range of products offered to the public. More people than ever are invested in securities, either directly or through mutual funds. Technology has also fundamentally changed the way these markets operate and how investors interact with them. SEC routinely prioritizes and allocates resources, but the agency is under increasing pressure because of the staffing imbalances caused by its growing workload. Staffing shortages have delayed critical regulatory activities, such as reviewing rule findings and issuing guidance. Oversight and supervisory functions have also been affected. SEC has tried to address its high turnover by offering special pay rates and retention bonuses, but the lack of funding for pay parity means little relief in the short-term. SEC has generally managed the gap between staff and workload by determining which basic duties mandated by statute could be accomplished with existing resources. This approach has forced SEC to be largely reactive rather than proactive.
Recommendations for Executive Action
|United States Securities and Exchange Commission||1. The chairman, SEC, should develop short-term and long-term strategies to address the challenges SEC faces. In the short-term, SEC should take definitive steps to continue to address its turnover problem and fill its vacant positions. These actions should include exploring use of its no-year fund to expand recruiting and retention efforts to ensure that all available resources are maximized to attract and retain staff. Likewise, SEC should explore innovative ways to attract senior level staff and bring in additional information technology expertise to better position itself to oversee evolving securities markets.|
|United States Securities and Exchange Commission||2. In the long-term, the chairman, SEC, should address several issues relating to strategic planning by broadening SEC's strategic planning process to systematically determine regulatory priorities and resource levels needed to fulfill its mission. Furthermore, once SEC has completed the strategic planning process, each division and office should accurately identify the skills needed to perform the regulatory priorities identified. Once this is completed, SEC should link the strategic plan to staffing allocations and workforce determinations and expand its existing recruiting effort to include any additional disciplines identified as necessary to effectively regulate evolving securities markets.|