MAJOR ACCOMPLISHMENTS IN 2005 • The SEC has received an unqualified…


• The SEC has received an unqualified opinion on its 2005 financial statements. In its audit opinion, the Government Accountability Office (GAO) concludes that the SEC’s financial statements “are presented fairly, in all material respects, in conformity with U.S. generally accepted accounting principles.”

• This year, the SEC significantly accelerated its financial reporting in order to issue these financial statements by November 15, the deadline set by the Office of Management and Budget. In its audit opinion, GAO called this a “notable achievement.”

• FY 2005 was a year of tremendous accomplishment for the SEC in terms of its policy agenda.

o Enforcement Program: The SEC initiated 947 investigations, 335 civil proceedings, and 294 administrative proceedings covering a wide range of issues, including mutual fund and investment adviser fraud, accounting fraud, and failures at self-regulatory organizations.

o Securities Offering Reform: The SEC adopted landmark amendments to update the Securities Act of 1933 by relaxing restrictions on communications by issuers and underwriters around the time of securities offerings. The reforms will also facilitate rapid market access for well-known issuers.

o Disclosure Reviews: The SEC successfully met the Sarbanes-Oxley requirement to review, between 2003 and 2005, the financial statements of every reporting company and investment company issuer.

o Interactive Data: The Commission in 2005 established a pilot program to permit registrants to file financial data in an interactive data format called eXtensible Business Reporting Language (XBRL). This new technology allows investors, analysts, market participants, and the SEC itself to analyze and personalize financial data in ways that are best suited for their purposes.

o Equity Market Structure: In 2005, the SEC adopted Regulation NMS, which is aimed at strengthening competition in the national market system for equity securities.

o Hedge Fund Registration: In 2005, the SEC adopted a rule requiring most hedge fund managers to register as investment advisers. The regulation was prompted by significant recent growth in hedge funds, which are estimated to have $1 trillion in assets.

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