Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Monday, September 12, 2011

SEC Issues First Report on Implementing Consultant's Recommendations

The SEC released its Report on the Implementation of SEC Organizational Reform Recommendations
As Required by Section 967 of the Dodd–Frank Act
.  That section directed the SEC to engage an independent consultant to conduct a broad and independent assessment of the SEC’s internal operations, structure, funding, and the agency’s relationship with Self-Regulating Organizations (SROs).  The SEC is also required to report on its progress in implementing the consultant's recommendations every six months.  According to the executive summary:

Issued in March 2011, the consultant’s study provided 16 optimization initiative recommendations designed to increase the SEC’s efficiency and effectiveness. In the six months since the study was issued, the SEC has developed the necessary program management and oversight infrastructure to address the next step in the agency’s on-going multi-year change initiative: conducting a thorough analysis of each recommendation and designing appropriate approaches for those recommendations selected for implementation.

Over the next six months, significant work will have been done within each workstream to analyze the Boston Consulting Group’s (BCG) recommendations and recommend what, if any, actions should be taken. While the agency has made progress, the path forward is still long. As the analysis completes, the agency will develop implementation options, then create a time-phased, multi-year implementation plan that accounts for constraints in the agency budget, management time, and agency priorities. The agency will focus on assessing the schedule, costs, and management bandwidth required for each initiative; identifying cross-work-stream integration points; and developing a detailed prioritization and implementation plan that sequences the various implementation activities. It is at that time that trade-offs and hard decisions must be made about how to best expend resources, time and funding.

The SEC recognizes that successful implementation of many of the ideas in the BCG study will require a long-term commitment and sustained effort over several years. While still in the early stages of considering the BCG recommendations, the SEC is committed to an open and transparent process. Consistent with the statute, the agency intends to report to Congress on a regular basis on the actions taken in response to the study.

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