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SEC Releases FY2014 Financial Review, Indicates FY2015 Goals

The SEC released its Fiscal Year 2014 Agency Financial Report last week. In the document, the SEC details its activities and financial position for the year, and adds insight into the agency’s plan for the new fiscal year. Of $1.4 billion in program costs for the most recent fiscal year (an increase of 8% over the prior fiscal year), the agency’s enforcement program comprised the largest portion at $487 million, with OCIE coming in second at $282 million.

In FY15, the report notes that the Commission will attempt to complete rulemaking required by the Dodd-Frank and JOBS Acts, and then will turn its focus to “discretionary rulemaking in areas of critical importance for investors and other market participants, including asset management, equity and fixed income market structure, and financial infrastructure.” Among the goals for FY15, the report notes that the agency will focus on recommendations regarding a uniform fiduciary standard, a comprehensive rulemaking to improve equity market structure, enhanced fixed income pre-trade transparency, improved mutual fund and ETF information reporting provided to investors and to regulators, mitigation of conflicts of interest in the “issuer pay” model of credit rating agencies, and changes to the regulatory treatment of ETFs and target date funds. The report also noted that “OCIE will make governance and supervision of information technology systems a priority, including operational capability, business continuity planning, and cybersecurity.”

The report also examines the agency’s progress towards its Strategic Plan, Fiscal Years 2014-2018. While the report notes several areas in which the agency exceeded goals, it also reports that the agency fell short of the percentage of investment companies examined in the prior year (10% versus a goal of 12%), and the number of months between opening an investigation and commencing an enforcement action (21 months versus a goal of 20 months).