SEC Special Studies

The Commission or Commission staff often undertake special projects to study and report on current trends and issues facing the securities industry. These files will be updated on a periodic basis.

Studies currently available include:

Date	Study
Jul. 1, 2004	Report on Transactions in Municipal Securities (PDF, 2.4Mb) The report examines various characteristics of the more than 7 million transactions in municipal securities, aggregating $2.6 trillion, that took place between November 1, 1999 and October 31, 2000 and of the $2 trillion of municipal securities that were outstanding during that period. The report provides summary information on spreads, trading volume and turnover, and the variation in prices received (or paid) by customers purchasing the same municipal security on the same day. The reports also examines transaction activity classified by various characteristics of the bond, including interest rate type (fixed, variable or zero), issuance amount, insured status, rating, and maturity and includes information on other topics that may be of use in analyzing and understanding municipal securities markets.
Jun. 9, 2004	Variable Insurance Products (in PDF Format) Joint SEC/NASD Staff Report on Examination Findings Regarding Broker-Dealer Sales of Variable Insurance Products summarizes sound and weak practices identified during examinations. The findings describe practices noted during the examinations of broker-dealer sales of variable insurance products, particularly in the areas of suitability, sales practices, conflicts of interest, supervision, disclosure, books and records, and training. The Commission is making the report public in order to highlight issues in this area and to assist broker-dealers in evaluating their own compliance programs.
Apr. 30, 2004	Report on Administrative Proceedings for the Period October 1, 2003 through March 31, 2004
Oct 21, 2003	Report on Administrative Proceedings for the Period April 1, 2003 through September 30, 2003
Sep. 29, 2003	Implications of the Growth of Hedge Funds At the request of the Commission, the staff conducted a comprehensive study of hedge funds, their operations, their service providers and their interactions with investors and the markets. The Report outlines the staff's factual findings from the study, identifies concerns and recommends certain regulatory and other modifications to improve the current system of hedge fund regulation and oversight.
Jul. 25, 2003	Study Pursuant to Section 108(d) of the Sarbanes-Oxley Act of 2002 on the Adoption by the United States Financial Reporting System of a Principles-Based Accounting System Section 108(d) directs the Commission to study the adoption of a more principles-based approach to standard setting in the U.S. The staff study concludes that objectives-oriented standards meet the objectives of principles-based standards and would, if properly implemented, result in more transparent information being provide to investors while holding management and auditors responsible for providing financial information which conforms to the objectives of the accounting standards.
Jul. 15, 2003	Review of the Proxy Process Regarding the Nomination and Election of Directors In April 2003, the Commission directed the Division of Corporation Finance to formulate possible changes in the proxy rules and regulations and their interpretations regarding procedures for the election of corporate directors. This staff report summarizes prior Commission action and discusses alternatives for increasing shareholder participation in the proxy process regarding the nomination and election of directors and otherwise improving the proxy process in this area.  Review of the Proxy Process and Appendix A - Summary of Comments (in HTML)  Review of the Proxy Process (in PDF Format)  Appendix A - Summary of Comments (in PDF Format)
Apr. 15, 2003	Report on Administrative Proceedings for Period October 1, 2002 through March 31, 2003
Apr. 7, 2003	Interagency Paper on Sound Practices to Strengthen the Resilience of the U.S. Financial System The Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, and the Securities and Exchange Commission identified sound practices to strengthen the resilience of critical U.S. financial markets and minimize the immediate systemic effects of a wide-scale disruption. The paper applies most directly to the clearing and settlement activities of a limited number of financial institutions.
Mar. 11, 2003	Staff Report: Joint SEC/NASD/NYSE Report of Examinations of Broker-Dealers Regarding Discounts on Front-End Sales Charges on Mutual Funds Report of the Staff from the Securities and Exchange Commission, NASD and the New York Stock Exchange regarding whether investors are receiving the benefit of available discounts on front-end sales charges in mutual fund transactions. This report contains Staff's findings, conclusions and remedial actions.
Feb. 3, 2003	Staff Report: Enhancing Disclosure in the Mortgage-Backed Securities Markets Report of the Task Force formed by staff of the Department of Treasury, Office of Federal Housing Enterprise Oversight and the SEC to conduct a study of disclosures in offerings of mortgage-backed securities ("MBS"). The purpose of the joint study was to evaluate current disclosure practices and consider whether disclosure enhancements are desirable in assisting investors to make informed investment decisions. This report contains the Task Force's findings, conclusions, and recommendations regarding enhanced MBS disclosures.
Jan. 24, 2003	Report on the Role and Function of Credit Rating Agencies in the Operation of the Securities Markets Report Pursuant to Section 702 of the Sarbanes-Oxley Act of 2002 — regarding the role and function of credit rating agencies in the operation of the securities markets. Specifically, the report addresses the role of credit rating agencies in the evaluation of issuers of securities; the importance of that role to investors and the functioning of the securities markets; any impediments to the accurate appraisal by credit rating agencies of the financial resources and risks of issuers of securities; any barriers to entry into the business of acting as a credit rating agency, and any measures needed to remove such barriers; any measures which may be required to improve the dissemination of information concerning such resources and risks when credit rating agencies announce credit ratings; and any conflicts of interest in the operation of credit rating agencies and measures to prevent such conflicts or ameliorate the consequences of such conflicts.
Jan. 24, 2003	Study and Report on Violations by Securities Professionals Report Pursuant to Section 703 of the Sarbanes-Oxley Act of 2002 – Regarding the number of securities professionals practicing before the Commission who 1) have aided and abetted a violation of the Federal securities laws but who have not been sanctioned, disciplined, or otherwise penalized as a primary violator in any administrative action or civil proceeding, and 2) have been primary violators of the Federal securities laws between 1998 and 2001.
Jan. 24, 2003	Report Pursuant to Section 308(c) of the Sarbanes-Oxley Act of 2002 Regarding enforcement actions by the Commission that have included proceedings to obtain civil penalties or disgorgements over the past five years, and other methods to more efficiently, effectively, and fairly provide restitution to injured investors and to improve the collection rates for civil penalties and disgorgement
Jan. 24, 2003	Report Pursuant to Section 704 of the Sarbanes-Oxley Act of 2002 Regarding enforcement actions by the Commission involving violations of reporting requirements imposed under the securities laws, and restatements of financial statements over the past five years, to identify areas of reporting that are most susceptible to fraud, inappropriate manipulation, or inappropriate earnings management.
Oct. 16, 2002	Report on Administrative Proceedings for the Period April 1, 2002 through September 30, 2002
May 6, 2002	Interagency White Paper on Structural Change in the Settlement of Government Securities: Issues and Options The White Paper is designed to facilitate the discussion of possible structural changes in the settlement of government securities transactions. It is not intended, however, to suggest that any of the approaches represent an improvement over current arrangements or that structural change is necessary. Rather, the goal of the White Paper is to provide a framework for discussion by identifying issues and questions that need to be further explored. Comments from the public, to be received no later than August 12, 2002, are invited; see the paper itself for details.
Apr. 17, 2002	Report on Administrative Proceedings For The Period October 1, 2001 through March 31, 2002
Mar. 6, 2002	Pay Parity Implementation: Plan and Report With the enactment of legislation that allows the SEC to create a compensation system similar to the systems of other federal financial regulators, the Commission finally will be in a position to implement a permanent solution to our serious recruitment and retention problems - provided the SEC receives the funding to do so. This report describes the SEC's careful approach to implementing a new compensation system.
Dec. 2001	Joint Report on Retail Swaps This report responds to Section 105(c) of the Commodity Futures Modernization Act of 2000, which directed the Board of Governors of the Federal Reserve System, the Secretary of the Treasury, the Commodity Futures Trading Commission, and the Securities and Exchange Commission to study issues regarding the offering of swap agreements to retail customers and to submit a report to Congress on the findings and conclusions of the study, along with any recommendations for legislative action. As indicated in the report, the agencies do not recommend legislative action at this time for swap agreements offered to retail customers.
Dec. 2001	Regulation Fair Disclosure Revisited At the public meeting adopting Regulation FD, the Commissioners committed to monitor the impact of Regulation FD on information flow and assess whether the rule had chilled corporate communications or given rise to any other negative, unintended consequences. This report, which is based in part on a roundtable discussion convened in New York on April 24, 2001, examines Regulation FD one year after its effective date.
Oct. 31, 2001	Report on Administrative Proceedings For the Period April 1, 2001 through September 30, 2001 Rule 900 of the Commission's Rules of Practice (17 CFR 201.900) requires the Commission's Secretary to issue each October and April a status report on the Commission's administrative proceedings caseload.
Apr. 30, 2001	Report on Administrative Proceedings for October 1, 2000 through March 31, 2001 Rule 900 of the Commission's Rules of Practice (17 CFR 201.900) requires the Commission's Office of the Secretary to publish in the SEC Docket each October and April a status report on the Commission's administrative proceedings caseload.
Jan. 25, 2001	Examinations of Broker-Dealers Offering Online Trading: Summary of Findings and Recommendations The staff of the Commission's Office of Compliance Inspections and Examinations undertook a review of broker-dealers offering online trading in light of the phenomenal increase in online trading in recent years. The report describes the general findings and observations from the examinations in areas such as disclosure and investor education, advertising, best execution, operational capability, security measures, and employee supervision. The examinations revealed examples of sound practices as well as areas where some broker-dealers can enhance their practices. The staff is making the report public in order to highlight issues in this area and to assist broker-dealers in evaluating their own online trading programs.
Jan. 10, 2001	Report on Mutual Fund Fees and Expenses Staff of the Division of Investment Management conducted a study on mutual fund fees and expenses. The study presents trends in mutual fund fees and expenses experienced over the past twenty years in light of: (1) the significant growth in the mutual fund industry during the period; (2) U.S. households' increasing reliance on mutual funds to finance retirement, housing, and children's education; (3) the significant impact that mutual fund fees and expenses have on investor returns; and (4) the ongoing debate over the appropriate level of mutual fund fees and expenses. It is anticipated that the report will be useful to Congress and the Commission in overseeing the mutual fund industry, to members of the mutual fund industry, including fund directors, and to the investing public. December 2000; Posted January 10, 2001
Jan. 8, 2001	Report on the Comparison of Order Executions Across Equity Market Structures This report, by the Office of Economic Analysis, compares the costs of trading equity securities in the Nasdaq market with trading of listed securities on the New York Stock Exchange. It was found that on market orders of 100-499 shares for very large companies the average effective spreads (the actual costs paid by investors) are nearly equal. For 100-499 share market orders in the large, middle, and small categories, the first matched-pairs test shows the average Nasdaq effective spreads are from 5.7 to 11 cents per share wider than those for the matched NYSE stocks. The report also finds that market order executions are generally faster on Nasdaq than on the NYSE for 100-499 share orders. For statistical details, users are urged to read the report itself.
Dec. 2000	Payment for Order Flow and Internalization in the Options Markets In light of recent changes in the options markets, Chairman Levitt directed the Staff of the Office of Economic Analysis and the Office of Compliance Inspections and Examinations to prepare a report describing current payment for order flow and internalization practices, and outlining how the practices of payment for order flow and internalization have affected order routing decisions and the execution quality of customer options orders. The Staff expects that this report will be helpful to the Commission in determining whether regulatory action is needed to strengthen price competition and order interaction in the options markets.
Nov. 2000	Report on Reciprocal Subpoena Enforcement Laws Congress directed the Commission, in cooperation with the states, to take steps to encourage the adoption of state laws authorizing reciprocal subpoena enforcement in state securities investigations. The Commission was directed to submit a report identifying the states that have adopted such provisions, describing the actions undertaken to promote their adoption, and identifying any further recommended actions. This report responds to that requirement.
Jun. 2000	Electronic Communication Networks and After-Hours Trading Pursuant to a Congressional request, the staff of the SEC's Division of Market Regulation have prepared a report analyzing the current operations of ECNs and after-hours trading, their impact on the securities markets, and recent regulatory initiatives that have been taken to address these developments. Overall, the Report indicates that both the established markets and ECNs have sought to provide innovative mechanisms over the last few years to meet investor demands for greater flexibility in the timing of their trades and in their trading venues.
May 4, 2000	Report Concerning Display of Customer Limit Orders In compliance with Chairman Levitt's request, Commission staff in the Office of Compliance Inspections and Examinations, together with the Office of Economic Analysis, have prepared a public report analyzing the display of limit orders in our equities and options markets and the adequacy of the markets' surveillance and disciplinary programs for limit order display
May 1, 2000	Report on Administrative Proceedings for October 1, 1999 through March 31, 2000 Rule 900 of the Commission's Rules of Practice (17 CFR 201.900) requires the Commission's Office of the Secretary to publish in the SEC Docket each October and April a status report on the Commission's administrative proceedings caseload.
Feb. 2000	Report of Examinations of Day-Trading Broker-Dealers From October 1, 1998 through September 30, 1999, the Staff from the SEC's Office of Compliance Inspections and Examinations conducted an examination sweep of 47 registered broker-dealers providing day-trading facilities to the general public. This is a Report by the Commission's Staff summarizing the results of these examinations. The purpose of the examinations was to review each firm's compliance with federal securities laws and self-regulatory organization rules. In addition, examiners reviewed how day-trading activities fit within the current securities regulatory structure and identified regulatory issues that may require further consideration.
Nov. 1999	Online Brokerage: Keeping Apace of Cyberspace Report by Commissioner Laura S. Unger on the subject of technology and and its impact on retail brokerage. Consists of an overview of the issues on-line brokerage raise for investors and the Commission and explores how on-line brokerage impacts the Commission's traditional regulatory scheme. Discusses findings from three roundtables conducted with participants from full-service and discount, on-line and off-line brokerage industry representatives, securities practitioners, academics, regulators, market participants, and investors and makes certain recommendations to the Commission. Topics discussed at the roundtable and covered in the Report include industry trends, suitability, best execution, market data, systems capacity, investor education, chat rooms privacy and portals. Full report, with Executive Summary and Appendices, in PDF format: cybrtrnd.pdf
Sep. 1999	Municipal Securities Cases and Materials This compilation was prepared by the Office of Municipal Securities. It contains the full text of certain Commission orders/opinions, administrative law judge decisions, litigation releases, and 21(a) reports, as well as federal court decisions, involving participants in municipal securities transactions up through April 21, 1999. In some instances, the document is a determination of fact and law following a hearing; in others, findings made by the Commission in a settled proceeding in which the named party has neither admitted nor denied the findings, but consented to entry of the order. In still other instances, such as a complaint, the document may consist of allegations. This compilation organizes enforcement actions by relevant participants to municipal securities transactions or topics. While this compilation provides an extensive review of Commission activity in the municipal securities market, it does not purport to be exhaustive.
Jul. 1999	Broker-Dealer Risk Management Practices Joint Statement Issued by the examination staffs of the Securities and Exchange Commission, the New York Stock Exchange, and NASD Regulation, Inc., this statement provides examples of material weaknesses in the policies and practices employed by certain broker-dealers to manage risk and examples of sound practices that were noted during on-site examinations of broker-dealers' risk management practices conducted over the past several years.
Jul. 1999	Third Report on the Readiness of the United States Securities Industry and Public Companies To Meet the Information-Processing Challenges of the Year 2000 This report presents the SEC staff's current findings on the securities industry's state of readiness for the Year 2000, as well as the Commission's position on issuer disclosure obligations, analysis of Year 2000 disclosure to date, and actions that the Commission and its staff are taking to address the Year 2000 problem.
Apr. 30, 1999	Report on Administrative Proceedings for October 1, 1998 through March 31, 1999 Rule 900 of the Commission's Rules of Practice (17 CFR 201.900) requires the Commission's Office of the Secretary to publish in the SEC Docket each October and April a status report on the Commission's administrative proceedings caseload. 3441352.txt [explanatory material only]; apst99-1.pdf [report, in PDF format])
Oct. 26, 1998	Report on Administrative Proceedings for April 1, 1998 through September 30, 1998 Rule 900 of the Commission's Rules of Practice (17 CFR 201.900) requires the Commission's Office of the Secretary to publish in the SEC Docket each October and April a status report on the Commission's administrative proceedings caseload. 3440602.txt [explanatory material only]; apst98-3.pdf [report, in PDF format])
Sep. 1998	Inspection Report on the Soft Dollar Practices of Broker-Dealers, Investment Advisers and Mutual Funds Because of the widespread use of soft dollars by advisers, the diverse perceptions by observers that the use of soft dollars is either inherently abusive or beneficial to clients (or somewhere in-between), and a number of recent enforcement cases involving soft dollar practices, the SEC Office of Compliance, Inspections and Examinations conducted an inspection sweep to gather information about the current uses of soft dollars. The findings from these inspections, conducted from November 1996 through April 1997, are set forth in this report.
Sep. 1998	Trading Analysis of October 27 and 28, 1997 On October 27 and 28, 1997, the nation's securities markets fell by a record absolute amount on then-record trading volume. This report, prepared by the staff of the Commission's Division of Market Regulation, reconstructs the days' events, describes the effects of circuit breakers on market price movements, and reviews the systems performance of major full-service and online broker-dealers.
Sep. 1998	Technology Roundtable: Report of Proceedings This report, prepared by the staff of the Commission's Division of Market Regulation, discusses the Technology Roundtable that the Commission held on April 14, 1998. The roundtable brought together leaders from inside and outside the securities industry to explore the impact of changing technology on the securities markets and on the regulatory environment of the future. (in PDF format)
Jun. 1998	Second Report on the Readiness of the United States Securities Industry and Public Companies To Meet the Information-Processing Challenges of the Year 2000 This report presents the SEC staff's current findings on the securities industry's state of readiness for the Year 2000, as well as the staff's position on issuer disclosure obligations, a survey of Year 2000 disclosure by public companies to date, and the actions that the Commission and its staff are taking to address the Year 2000 problem. Commission staff will continue to update, supplement, and reassess these findings in the upcoming months.
Apr. 30, 1998	Report on Administrative Proceedings from October 1, 1997 to March 31, 1998 Rule 900 of the Commission's Rules of Practice (17 CFR 201.900) requires the Commission's Office of the Secretary to publish in the SEC Docket each October and April a status report on the Commission's administrative proceedings caseload. 34-39935.htm [explanatory material only]; apst98-2.pdf [report, in PDF format])
Oct. 1997	Report on the Uniformity of State Regulatory Requirements for Offerings of Securities That Are Not “Covered Securities” Pursuant to Section 102(b) of the National Securities Markets Improvement Act of 1996 NSMIA, in Section 102(b), requires the U.S. Securities and Exchange Commission to "conduct a study, after consultation with the states, issuers, brokers, and dealers, on the extent to which uniformity of state regulatory requirements for securities or securities transactions has been achieved for securities that are not covered securities..." (the "Uniformity Study"). This report is submitted in response to this requirement.
Sep. 1997	Pursuant to Section 509(5) of the National Securities Markets Improvement Act of 1996: Report on Promoting Global Preeminence of American Securities Markets Section 509 requires the Commission to report to the Congress on progress in the development of international accounting standards and the outlook for successful completion of a set of international standards that would be acceptable to the Commission for offerings and listings by foreign corporations in U.S. markets. This report is submitted in response to this requirement.
Sep. 1997	Report to the Congress: The Impact of Recent Technological Advances on the Securities Markets This report discusses the impact of recent technological advances on the securities markets, how these advances have changed the way the markets operate, and steps the Commission has taken to address these changes. The report also discusses the effect of recent technological advances on enforcement of the federal securities laws.
Sep. 1997	Report to the Congress on Section 107 of the National Securities Markets Improvement Act of 1996: Privatization of EDGAR Privatizing some or all of the EDGAR system has been seen as a possibility from the earliest days of design and development. The report outlines the issues surrounding privitization, looks at actions taken, and discusses future steps.
Jun. 1997	Report to the Congress on the Readiness of the United States Securities Industry and Public Companies To Meet the Information Processing Challenges of the Year 2000 This report presents the staff's findings as to the current state of readiness, their position with respect to corporate disclosure as it relates to the Year 2000 issue, actions they intend to continue to take to reduce the risk associated with the Year 2000 problem, and the staff's plans to meet future reporting requirements.
Apr. 16, 1997	Report to the President and Congress on the First Year of Practice Under the Private Securities Litigation Reform Act of 1995 A study of the impact of the Reform Act on the effectiveness of the securities laws and on investor protection, and on the extent and nature of any litigation under the Act.
Apr. 15, 1997	Report on the Practice of Preferencing A study was conducted on the impact on investors and the national market system of the practice known as `preferencing' on one or more registered securities exchanges. It includes consideration of how preferencing impacts the execution prices received by retail securities customers whose orders are preferenced; the ability of retail securities customers in all markets to obtain executions of their limit orders in preferenced securities; and the cost of preferencing to retail securities customers. Large (300 KB) file with numerous attachments.
Jul. 24, 1996	Report of the Advisory Committee on the Capital Formation and Regulatory Processes To access report by sections, click here
Jul. 8, 1996	Summary of Comments and Discussion Regarding Protections for Senior Citizens and Qualified Retirement Plans This study consists of a summary and discussion of comments received from the public concerning the role of senior citizens and retirement plans in the securities markets; recent Commission initiatives in this area; and selected Commission enforcement actions.
Mar. 1996	The Joint Regulatory Sales Practice Sweep Report A review of the sales practice activities of selected registered representatives and the hiring, retention, and supervisory practices of the brokerage firms employing them. To access report by sections, click here
Mar. 5, 1996	Report of the Task Force on Disclosure Simplification The Task Force on Disclosure Simplification, after a review of rules and forms that generally impose costs on capital formation, developed 140 recommendations to streamline and simplify rules and forms in a manner consistent with investor protection. smpl.txt; or click here to access HTML version and graphics)
Jun. 1995	The Regulation of Public-Utility Holding Companies Prepared by the Commission's Division of Investment Management, this report describes how significant changes are needed in the current regulatory system of public utility holding companies.
Apr. 10, 1995	Report On Broker-Dealer Compensation Produced by a broad-based Committee on Compensation Practices headed by Merrill Lynch Chairman Daniel P. Tully, to review industry compensation practices for registered representatives and branch managers, to identify actual and perceived conflicts of interest for these parties and to identify the "best practices" used in the industry to eliminate, reduce or mitigate these conflicts.
May 1994	The Large Firm Project This report announces the findings of a review undertaken by the SEC, the New York Stock Exchange and the National Association of Securities Dealers, Inc., of the hiring, retention and supervisory practices of nine of the largest broker-dealers in the United States. This review was commenced because of increased concerns regarding the frequency and severity of sales practice abuses perpetrated by some registered representatives (often referred to as "rogue brokers").
Sep. 14, 1994	Testimony of Arthur Levitt, Chairman, U.S. Securities and Exchange Commission Concerning "The Large Firm Project" Before The Subcommittee On Telecommunications And Finance, Committee on Energy and Commerce, U.S. House of Representatives
	Report On The Status of Recommendations From The Large Firm Project Prepared By The Division of Market Regulation and The Division of Enforcement.
Sep. 26, 1994	Mutual Funds and Derivative Instruments This memorandum responds to a Congressional request for a Commission study of mutual fund use of derivatives and, more particularly, the adequacy of applicable laws and regulations. The memorandum describes Commission actions taken to address investor protection issues raised by mutual fund use of derivatives and contains staff recommendations for further Commission action.
Sep. 1994	Personal Investment Activities of Investment Company Personnel The Commission's Division of Investment Management has undertaken a detailed examination of the personal investment activities of fund managers associated with thirty fund complexes, and conducted an analysis of the regulatory scheme that governs the investment activities of fund personnel generally. This report describes the Division's findings and contains recommendations designed to enhance the oversight of the personal investment activities of fund personnel and improve ethical standards throughout the fund industry.

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