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FISCAL YEAR 2025
REPORT
FISCAL YEAR 2024
AGENCY
FINANCIAL
REPORT
Protecting Investors for 90 Years
Certificate of Excellence in
Accountability Reporting
®
presented to the
U.S. Securities and
Exchange Commission
in recognition of outstanding effort in preparing the
Agency Financial Report for fiscal year 2024
Andrew Lewis, CGFM, CPA
Chair, CEAR Board
Ann M. Ebberts, MS, PMP
Chief Executive Officer, AGA
Certificate of Excellence in
Accountability Reporting
The U.S. Securities and Exchange Commission’s (SEC) fiscal
year (FY) 2024 Agency Financial Report (AFR) received the
Certificate of Excellence in Accountability Reporting from the
AGA for the 19th consecutive year. This award is presented to
federal government agencies whose annual reports achieve
the highest standards in demonstrating accountability and
communicating results.
MESSAGE FROM
THE CHAIRMAN
On my appointment as Chairman, I noted that it is a new day at
the U.S. Securities and Exchange Commission (SEC) as we return to
our core mission of protecting investors, maintaining fair, orderly,
and efficient markets, and facilitating capital formation. This work,
described more fully in the pages that follow, is as relevant and essential
today as it was when Congress first entrusted us with it over 90 years
ago. Together with my fellow Commissioners, Congress, and SEC staff,
I look forward to ensuring that the United States is well-positioned to
seize on the new excitement for investment and economic opportunity
that President Trump’s leadership and pro-growth policies have inspired.
OUR MISSION
To protect investors,
maintain fair, orderly,
and efficient markets,
and facilitate capital
formation.
Investor protection—holding accountable those who lie, cheat, and
steal—is vital to our mission, for while capital markets thrive on many
factors, they endure on trust. The SEC will remain vigilant in our role
to ensure that investors have confidence to participate in the markets.
Capital formation—fostering a direct, economical route for investors’
capital to find its way to entrepreneurs and industry—is also at the root
of what we do. The agency must be attuned to the distinct headwinds
businesses face and work to unlock, rather than undermine, capital
raising in a manner consistent with the SEC’s mission. Our task, as well
as our responsibility, is to ensure that the agency’s regulatory framework
keeps pace with their ambition. The third pillar of our mission is
maintaining fair, orderly, and efficient markets. Congress calls on the
Commission to ensure that our regulations balance costs and benefits,
and that they do not become unduly burdensome by adding needless
friction to the marketplace. During my tenure as Chairman, the SEC will
not stray from these core functions.
Of course, the dynamism of today’s markets compels us to align the
agency’s enduring principles with emergent possibilities. For example, a
key priority of my Chairmanship will be to develop a rational regulatory
framework for crypto asset markets that establishes clear rules of
the road for the issuance, custody, and trading of crypto assets while
i
continuing to discourage bad actors from violating the
law. Clear rules of the road are necessary for investor
protection against fraud—not the least to help them
identify scams that do not comport with the law. This
undertaking requires coordination across multiple offices
and divisions within the Commission, which is why I
launched Project Crypto and directed the SEC’s policy
divisions to work with the Crypto Task Force. For too
long, policymaking silos have hindered the Commission.
The Crypto Task Force, led by Commissioner Hester
Peirce, exemplifies how our policy divisions can come
together to provide long-needed clarity and certainty to
the American public.
In this work, the SEC’s greatest strength remains its
people. Across our Washington, DC, headquarters and
10 regional offices, approximately 4,000 dedicated
public servants advance the agency’s mission with
integrity and skill. For context, the agency currently
oversees more than 30,000 entities, including over
13,500 registered funds, 15,900 investment advisers,
3,200 broker-dealers, and 419 municipal advisors, as
well as 366 transfer agents, 111 alternative trading
systems, 29 national securities exchanges, 10 credit
rating agencies, 6 active registered clearing agencies, and
3 security-based swap data repositories. Our oversight
responsibilities extend also to other organizations,
including the Public Company Accounting Oversight
Board, the Financial Industry Regulatory Authority, the
Municipal Securities Rulemaking Board, the Securities
Investor Protection Corporation, and the Financial
Accounting Standards Board. The breadth of this
mandate reflects the complexity and vitality of modern
capital markets.
Looking ahead, I am confident in the direction of
our work at this pivotal moment for the American
economy. Entrepreneurs, businesses, and individuals
here at home and around the globe are eager to invest
in America. This SEC will work to protect investors
from fraud, keep politics out of how our securities laws
and regulations are applied, and advance clear rules of
the road that encourage investment in our economy to
the benefit of all Americans. We will strive to promote
capital formation rather than stifle it. We will work
together to ensure American investors get disclosures
that actually help them to understand the true risks of
an investment. And we will make every effort to position
the U.S. as the best and most secure place in the world
to invest and to do business.
I am pleased, therefore, to present the Fiscal Year (FY)
2025 Agency Financial Report (AFR), which details our
progress in advancing these priorities—and reflects the
dedication of the staff who make it possible. The AFR
also includes the results of an independent audit of our
FY 2025 financial statements. The financial and performance data in this report are complete and accurate
under the Office of Management and Budget guidance.
PAUL S. ATKINS
Chairman
January 12, 2026
ii
CONTENTS
Introduction.............................................................................................................................................................................1
Management’s Discussion and Analysis........................................................................................................................3
Our Mission..................................................................................................................................................................... 4
About Us......................................................................................................................................................................... 4
Our Organization..............................................................................................................................................................4
Our History..........................................................................................................................................................................4
Our Purpose........................................................................................................................................................................4
Our Year in Review.......................................................................................................................................................5
Financial Highlights.................................................................................................................................................... 12
Performance Highlights............................................................................................................................................ 18
Analysis of Systems, Control, and Legal Compliance.................................................................................. 27
Annual Assurance Statement.....................................................................................................................................28
Management’s Assessment of Internal Control..................................................................................................29
Enterprise Risk Management.....................................................................................................................................29
Other Reviews................................................................................................................................................................. 30
Federal Information Security Modernization Act (FISMA)..............................................................................31
Financial Section................................................................................................................................................................ 33
Report of Independent Auditors.........................................................................................................................34
Enclosure I: Management’s Response to Audit Opinion............................................................................. 41
SEC Financial Statements......................................................................................................................................42
Notes to the Financial Statements...................................................................................................................... 47
Investor Protection Fund Financial Statements.............................................................................................84
Notes to the Investor Protection Fund Financial Statements..................................................................86
Other Information.............................................................................................................................................................. 95
IG’s Statement on Management and Performance Challenges...............................................................96
Summary of Financial Statement Audit and Management Assurances............................................. 104
Payment Integrity Reporting Details............................................................................................................... 105
Civil Monetary Penalty Adjustment for Inflation......................................................................................... 107
Appendices........................................................................................................................................................................ 109
Appendix A: Glossary of Select Terms ..............................................................................................................111
Appendix B: Acronyms, Initialisms, and Abbreviations ............................................................................123
At the SEC, we work
together to make a positive
impact on the U.S. economy,
our capital markets, and
people’s lives.
Since our founding in 1934
at the height of the Great
Depression, we have stayed
true to our mission of
protecting investors,
maintaining fair, orderly,
and efficient markets, and
facilitating capital formation.
SEC.GOV/ABOUT/MISSION
INTRODUCTION
The SEC’s FY 2025 AFR provides detailed financial and performance information that
enables the President, Congress, and the public to assess the agency’s accomplishments
and understand its financial and operational picture. In lieu of a combined Performance and
Accountability Report, the SEC will also publish an Annual Performance Report (APR) to
provide a more in-depth review of strategic goals and performance results. The APR will be
included in the FY 2027 Congressional Budget Justification Report available in 2026.
The FY 2025 AFR satisfies the requirements contained in the Office of Management and
Budget (OMB) Circular A-136, Financial Reporting Requirements, and contains three main
sections and supplemental appendices.
Management’s Discussion and Analysis
Other Information
Provides a high-level overview of the SEC, including its
mission, history, organization, and purpose, as well as
the agency’s FY 2025 overall performance. This section
also includes management’s assurances on internal
controls and an analysis of the SEC’s financial position
and operations.
Details the agency’s compliance with, and commitment
to, specific regulations. Included in this section are
performance and management challenges identified
by the Office of Inspector General in accordance with
the Reports Consolidation Act of 2000; a detailed
explanation of any significant erroneous payments
and overpayments recaptured as required by the
Payment Integrity Information Act of 2019; and
recent inflationary adjustments made to civil monetary
penalties in accordance with the Federal Civil Penalties
Inflation Adjustment Act of 1990, as amended.
Financial Section
Contains audited financial statements and accompanying
notes for the SEC and the SEC’s Investor Protection
Fund, required supplementary information, independent
auditor’s report on these statements, and management’s
response to that report.
Appendices
Offers additional resources related to the agency and
this report, including a glossary of selected terms and
frequently used acronyms, initialisms, and abbreviations.
Electronic copies of this AFR and prior year budget
reports are available at SEC.gov/reports.
INTRODUCTION | 1
MANAGEMENT’S
DISCUSSION AND
ANALYSIS
This section provides a high-level overview of the agency and its FY 2025 program and
financial performance.
About Us
Performance Highlights
Explains the SEC’s mission, organization, history,
and purpose.
Discusses the SEC’s performance planning framework,
the FY 2025 performance results, the process used to
verify and validate that data, and key performance
accomplishments.
Our Year in Review
Summarizes the agency’s mission-focused priorities
throughout FY 2025, and details specific areas upon
which the SEC will continue focusing to fulfill its
regulatory and oversight responsibilities.
Financial Highlights
Provides an overview of the SEC’s financial information,
including an analysis of the financial data presented in
the audited financial statements, the limitations of the
financial statements, and the sources and uses of the
SEC’s funds.
Analysis of Systems, Control, and
Legal Compliance
Provides management’s assessment and assurances on
the SEC’s internal controls under the Federal Managers’
Financial Integrity Act of 1982, and on the compliance
of the SEC’s financial systems with federal requirements
under the Federal Financial Management Improvement
Act of 1996. It also addresses the SEC’s compliance with
the Federal Information Security Modernization Act of
2014 and other laws and regulations.
MANAGEMENT’S DISCUSSION AND ANALYSIS | 3
Our Mission
Protect investors, maintain fair,
orderly, and efficient markets,
and facilitate capital formation.
ABOUT US
Our Organization
The SEC is an independent federal agency led by a
bipartisan, five-member Commission—one of whom
is designated as the Chairman—with staggered
five-year terms.
Each member of the Commission is appointed by the
President and confirmed by the Senate. The Chairman
serves as the chief executive and, by law, no more than
three of the Commissioners may belong to the same
political party.
The SEC’s headquarters are in Washington, DC, and
there are 10 regional offices across the United States.
(See SEC.gov/about/regional-offices.)
In FY 2025, the agency's functional responsibilities
were organized into 6 divisions and 25 offices.
A detailed organizational chart is available at
SEC.gov/files/secorg.pdf.
Our History
Prior to the Great Crash of 1929, there was little
support for federal regulation of the securities markets.
When the stock market crashed in October 1929, public
confidence in the markets plummeted. Congress held
hearings to identify problems and search for solutions.
4 | 2025 SEC AGENCY FINANCIAL REPORT
Based on those hearings, Congress passed the Securities
Act of 1933 (Securities Act)—the first federal law to
regulate the issuance of securities—followed by the
Securities Exchange Act of 1934 (Exchange Act).
The SEC was established to regulate and enforce
this legislation.
Our Purpose
The SEC is responsible for overseeing the nation’s
securities markets and certain primary participants,
including broker-dealers, investment companies,
investment advisers, clearing agencies, transfer agents,
credit rating agencies, and securities exchanges, as
well as organizations such as the Financial Industry
Regulatory Authority, Municipal Securities Rulemaking
Board, and the Public Company Accounting Oversight
Board. In addition, the SEC is responsible for reviewing
the disclosures and financial statements of all public
companies in the United States. Under the Dodd-Frank
Wall Street Reform and Consumer Protection Act
of 2010 (Dodd-Frank Act), the agency’s jurisdiction
was expanded to include certain participants in
the derivatives markets, private fund advisers, and
municipal advisors.
OUR YEAR IN REVIEW
During FY 2025, the SEC focused on its core mission
that Congress set for it more than 90 years ago. The
SEC’s three-part mission was enunciated by Congress
in the Securities Exchange Act of 1934 (Exchange Act):
protecting investors, maintaining fair, orderly, and
efficient markets, and facilitating capital formation.
public offerings (IPOs) and modernizing or revising
many other aspects of the Commission’s ruleset
and operations.
Digital Assets
Rulemaking has returned to regular order. The public
is given ample time to provide feedback. And the SEC
is taking into consideration how rules overlap and how
regulatory burdens build, in keeping with the agency’s
obligation to consider their costs and benefits.
The SEC under Chairman Atkins’s leadership is
working toward a rational regulatory framework for
crypto asset markets that establishes clear rules of the
road for the issuance, custody, and trading of crypto
assets while continuing to discourage bad actors from
violating the law. Clear rules of the road are necessary
for investor protection.
The following summarizes the agency’s priorities,
including the establishment of a framework for
digital assets, reinvigorating the market for initial
On January 21, 2025, the agency launched its Crypto
Task Force. The task force is working to lay out a
framework for coherent, transparent treatment of crypto
Crypto
Task Force
In FY 2025, the SEC established its Crypto
Task Force, which aims to provide clarity on
the application of the federal securities laws
to the crypto asset market, and to recommend
practical policy measures that foster innovation
and protect investors.
The Crypto Task Force
exemplifies how our policy
divisions can come together
to expeditiously provide long-
For more information about the Crypto Task
needed clarity and certainty to
Force, visit SEC.gov/about/crypto-task-force.
MANAGEMENT’S DISCUSSION
AND ANALYSIS
the American
public.| 5
–CHAIRMAN PAUL S. ATKINS
assets under the federal securities laws, grounded in
economic reality. Led by Commissioner Hester Peirce,
it collaborates with Commission staff and the public.
exemptive, and other authorities to make sure that
archaic rules and regulations do not smother innovation
and entrepreneurship in America.
The task force has held multiple roundtables, including
on further defining security status, tailoring regulation
for crypto trading, custody considerations, tokenization,
decentralized finance (also known as “DeFi”), and
financial surveillance and privacy.
The SEC voted on July 29, 2025, to approve orders to
permit in-kind creations and redemptions by authorized
participants for crypto asset exchange-traded product
(ETP) shares. Bitcoin and Ether ETPs, consistent
with other commodity-based ETPs approved by the
Commission, will be permitted to create and redeem
shares on an in-kind basis.
In July, President Trump signed the GENIUS Act into
law and the President’s Working Group on Digital Asset
Markets released its PWG Report, the blueprint to make
America first in blockchain and crypto technology.
Chairman Atkins shortly thereafter announced the
launch of “Project Crypto”—a Commission-wide
initiative to modernize the securities rules and
regulations to enable America’s financial markets to
move onchain.
BLOCKCHAIN
A type of distributed ledger, or peer-to-peer
database spread across a network, that records
all transactions in the network in theoretically
unchangeable, digitally recorded data packages
called blocks. Each block contains a batch of
records of transactions, including a timestamp
and a reference to the previous block, linking
the blocks together in a chain. The system
relies on cryptographic techniques for secure
recording of transactions. A blockchain can
be shared and accessed by anyone with
appropriate permissions.
In accord with the PWG Report’s recommendations,
Chairman Atkins directed the Commission staff to
draft proposals for clear and simple rules of the road
for crypto asset distributions, custody, and trading for
public notice and comment. While the Commission
staff works to draft these proposed regulations, the
Commission and its staff are considering interpretative,
6 | 2025 SEC AGENCY FINANCIAL REPORT
On September 2, 2025, SEC and the Commodity
Futures Trading Commission (CFTC) staff issued a
joint statement regarding the trading of certain spot
crypto asset products. This joint statement clarifies the
staff’s views that SEC- and CFTC-registered exchanges
are not prohibited from facilitating the trading of certain
spot commodity products. The joint effort exemplifies
how the staff of the two agencies can coordinate to
promote trading venue choice and optionality for
market participants.
Make IPOs Great Again
Chairman Atkins has made it a priority to “Make IPOs
Great Again.” The Commission is working to make
being a public company an attractive proposition for
more firms by eliminating compliance requirements that
yield no meaningful investor protections, minimizing
regulatory uncertainty, and reducing legal complexities
throughout the SEC’s rulebook.
Chairman Atkins detailed the concrete steps the SEC
is taking to restore the core principles of capital
formation and investor protections, including the
SEC’s current agenda items to “Make IPOs Great
Again.” These steps include:
• Simplifying and scaling the SEC’s disclosure
requirements to reduce the costs of preparing
SEC filings and, at the same time, making them
more comprehensible.
• De-politicizing shareholder meetings and returning
focus to voting on director elections and significant
corporate matters.
• Reforming the litigation landscape for securities
lawsuits to eliminate frivolous complaints, while
maintaining an avenue for shareholders to continue
to bring meritorious claims.
On March 3, 2025, the SEC announced that its
Division of Corporation Finance is further facilitating
capital formation by enhancing the accommodations
available to companies for nonpublic review of draft
registration statements.
In 2012, the Jumpstart Our Business Startups Act
permitted certain companies to confidentially submit
for staff review a draft registration statement for an IPO.
In 2017, the staff expanded these accommodations to
all companies conducting certain securities offerings,
including IPOs and follow-on offerings within one year
of their IPO.
With the SEC’s action in March, the accommodations
for companies submitting draft registration statements
for nonpublic review was further enhanced, expanding
the types of forms eligible to be submitted as draft
registration statements for nonpublic review and
permitting reporting companies to submit draft
registration statements for nonpublic review regardless
of how much time has passed since their IPO. In
addition, companies now have added flexibility to
start the review process earlier by omitting certain
underwriter disclosures from their initial submissions.
On September 17, 2025, the SEC published a policy
statement to announce that decisions about whether to
accelerate the effectiveness of a registration statement
will not be affected by the presence of a provision
requiring arbitration of investor claims arising under
the federal securities laws. The Commission’s role in
this debate is to provide clarity that such provisions
are not inconsistent with the federal securities laws.
Issuers have periodically asked whether a mandatory
arbitration provision for investor claims arising under
the federal securities laws would impact the acceleration
of the effectiveness of their registration statement. The
policy statement provides the Commission’s view that,
based on the Supreme Court’s current interpretation and
application of the Federal Arbitration Act, the existence
of such a provision will not impact determinations
whether to accelerate the effective date of a registration
statement. As a result, when deciding on whether to
accelerate effectiveness of a registration statement, the
Commission staff will focus on the adequacy of the
registration statement’s disclosures, including disclosure
regarding the arbitration provision.
FEDERAL ARBITRATION ACT
Enacted in 1925, this Act provides that written
arbitration agreements in “a contract evidencing
a transaction involving commerce . . . shall be
valid, irrevocable, and enforceable, save upon
such grounds as exist at law or in equity for the
revocation of any contract.”
MANAGEMENT’S DISCUSSION AND ANALYSIS | 7
Consolidated Audit Trail
The SEC has been working to cut the Consolidated
Audit Trail (CAT) costs, and Chairman Atkins has
instructed staff to undertake a comprehensive review of
the CAT to facilitate improvements needed to reduce
costs for investors further. That comprehensive review
will include, but is not limited to, taking a hard look
at the costs of CAT by examining the scope of what is
collected and whether any duplicative reporting systems
should be retired or otherwise modified.
CONSOLIDATED AUDIT TRAIL
A single, comprehensive database of orders to
trade in the National Market System securities
and over-the-counter equities that enables
regulators track all trading activity in the U.S.
equity and options markets.
On February 10, 2025, the SEC provided an exemption
from the requirement to report certain personally
identifiable information (PII)—names, addresses, and
years of birth—to the CAT for natural persons. Bad
actors have become increasingly sophisticated and, in
the event of a breach, may be able to use the names,
addresses, and years of birth to impersonate a customer
or broker-dealer and gain access to a customer’s
account. Providing an exemption from the requirement
to report this PII to the CAT helps mitigate potential
security risks.
On September 30, 2025, the SEC issued an order
granting conditional exemptive relief related to
certain requirements of the National Market
System (NMS) Plan governing the CAT, Rule 613
of Regulation NMS, and Rule 17a-1 under the
Exchange Act. This conditional exemptive relief
allows the self-regulatory organizations that are
the CAT NMS Plan participants to expeditiously
8 | 2025 SEC AGENCY FINANCIAL REPORT
and meaningfully reduce the operating costs of the
CAT while maintaining core regulatory functionality.
Chairman Atkins said upon supporting the relief that
it was “just the start.”
Task Forces
AI Task Force
In addition to the Crypto Task Force, the SEC on
August 1, 2025, announced the launch of a task force
on artificial intelligence (AI) that will spearhead the
agency’s efforts to enhance innovation and efficiency
in its operations through the responsible use of AI.
Recognizing the transformative potential of AI, the
SEC’s AI Task Force will accelerate AI integration to
bolster the SEC’s mission. It will centralize the agency’s
efforts and enable internal cross-agency and crossdisciplinary collaboration to navigate the AI lifecycle,
remove barriers to progress, focus on AI applications
that maximize benefits, and maintain governance.
The task force will support innovation from the SEC’s
divisions and offices and facilitate responsible AI
integration across the agency.
Cross-Border Task Force
The SEC on September 5, 2025, announced the
formation of a task force that will strengthen and
enhance the Division of Enforcement’s efforts to identify
and combat cross-border fraud harming U.S. investors.
The Cross-Border Task Force will focus initially on
investigating potential U.S. federal securities law
violations related to foreign-based companies, including
potential market manipulation, such as “pump-anddump” and “ramp-and-dump” schemes. The task force
also will focus enforcement efforts on gatekeepers,
particularly auditors and underwriters, which help these
companies access the U.S. capital markets. In addition,
it will examine potential securities law violations related
to companies from foreign jurisdictions, such as China,
where governmental control and other factors pose
unique investor risks.
SEC and CFTC Harmonization
In September 2025, Chairman Atkins and CFTC Acting
Chairman Pham issued a joint statement regarding a
new beginning for coordination between U.S. market
regulators. (This was in addition to the SEC and CFTC
staff joint statement regarding the trading of certain spot
crypto asset products.) Harmonization between U.S.
market regulators is essential to the viability of a broad
range of innovative products.
The securities and commodity derivatives regulatory
regimes have differing statutorily prescribed jurisdictions, but fostering innovation in both new markets
and new products demands that U.S. regulators be
flexible and agile.
The statement reaffirmed the need to ensure regulation
does not stand in the way of progress. By working in
lockstep, the two agencies can harness the nation’s
unique regulatory structure into a source of strength
for market participants, investors, and all Americans.
The statement further said that the Commissions should
consider harmonizing product and venue definitions;
streamlining reporting and data standards; aligning
capital and margin frameworks; and standing up
coordinated innovation exemptions using each agency’s
existing exemptive authority.
On September 29, the two agencies hosted a roundtable
on regulatory harmonization.
Trade-Through Prohibitions
On September 18, 2025, the SEC held a roundtable on
trade-through prohibitions in the NMS stock and listed
options markets. Regulation NMS, adopted more than
two decades ago, gave the SEC an opening to substitute
its own judgment for that of the marketplace. Rule 611,
or the Trade-Through Rule, has restricted the price at
which investors could trade by mandating execution
at or within the National Best Bid and Offer. This
led the industry to treat price as the only factor when
considering “Best Execution.” The roundtable was
the start of the staff engaging in a reassessment of
Regulation NMS.
RULE 611
Rule 611 was enacted to prevent “tradethroughs,” where a trade is executed in one
market at a worse price than is displayed on
another market.
Foreign Private Issuer Definition
The SEC on June 4, 2025, published a concept release
soliciting public comment on the definition of foreign
private issuer. Foreign private issuers benefit from certain
accommodations and exemptions from the disclosure
and filing requirements of the federal securities laws.
The concept release solicited public input on whether the
definition of foreign private issuer should be amended in
light of significant changes in the population of foreign
private issuers since 2003. SEC concept releases are a
means for the Commission to obtain public input in
advance of making decisions about possible rulemaking.
Executive Compensation
Since 1992, when the Commission instituted tabular
executive compensation disclosure, requirements for
disclosure have been expanded to focus more and more
on variations of components of compensation, rather
than on total compensation. The resulting disclosures
have become increasingly complex and lengthy, but it
is less clear if the increased complexity and length have
provided investors with additional information that is
material to their investment and voting decisions.
It is important for the Commission to engage in
retrospective reviews of its rules to ensure that they
continue to be cost-effective and result in disclosure of
material information without an overload of immaterial
information. As part of this review of its executive
compensation requirements, the SEC on June 26, 2025,
hosted a roundtable with representatives from public
companies and investors, as well as other experts in
this field.
MANAGEMENT’S DISCUSSION AND ANALYSIS | 9
Residential Mortgage-Backed
Securities and Asset-Backed
Securities Concept Release
Division of Economic and Risk
Analysis New Market Data, Analysis,
and Visualizations
The SEC on September 26, 2025, published a concept
release soliciting public comment on how to improve
current rules governing residential mortgage-backed
securities (RMBS) and certain aspects of asset-backed
securities (ABS).
The SEC’s Division of Economic and Risk Analysis
(DERA) in April published new data and analysis on
the key market areas of public issuers, exempt offerings,
commercial mortgage-backed securities, ABS, money
market funds, and security-based swap dealers in an
effort to increase transparency and understanding of our
capital markets amongst the public. These reports reflect
important information that is valuable to investors,
other market participants, and academics.
There have been no public RMBS offerings since 2013,
yet, as some RMBS market participants have noted, a
diverse array of securitization options is an important
part of a healthy mortgage market because it provides
access to a wider range of issuers and investors, reducing
reliance on any one source of liquidity and contributing
to lower consumer costs.
The concept release seeks feedback from the public
on whether there are SEC regulatory impediments
contributing to the absence of public RMBS offerings,
including whether certain disclosure requirements
should be revised and how certain sensitive information
about mortgage loans underlying the RMBS may
be shared with investors in light of privacy and
confidentiality concerns.
The concept release also seeks comment on whether
certain regulatory definitions should be revised, and
whether revisions to any other ABS regulations should
be considered to facilitate access to the public market.
PCAOB
In July 2025, Chairman Atkins, on behalf of the
SEC, solicited candidates for all five Board positions,
including the Chairperson, of the Public Company
Accounting Oversight Board (PCAOB). The PCAOB
was established by the Sarbanes-Oxley Act of 2002 and
oversees the audits of the financial statements of public
companies, brokers, and dealers through registration,
standard setting, inspection, and disciplinary programs.
Under the Act, the SEC selects members and the
Chairperson of the Board. On July 21, 2025, the SEC
announced that George R. Botic would serve as Acting
Chair of the PCAOB.
10 | 2025 SEC AGENCY FINANCIAL REPORT
In June 2025, DERA published new reports and data
on broker-dealers, mergers and acquisitions (M&A),
and business development companies (BDC).
The reports provide the public with information
about the changes in broker-dealer and M&A
activity over time. In addition, the BDC data allow
the public to conduct its own analysis of data filed
with the Commission.
Extension of Compliance Dates
Treasury Clearing
On February 25, 2025, the SEC extended by one year
the compliance dates for Rule 17ad-22(e)(18)(iv)(A) and
(B) under the Exchange Act by one year to December
31, 2026, for eligible cash market transactions, and
June 30, 2027, for eligible repo market transactions.
This extension was related to rule changes the SEC
adopted in December 2023 that would transition the
U.S. Treasury securities markets to central clearing.
The extension was necessary to provide additional time
for further engagement on compliance, operational,
and interpretive questions, and to facilitate an orderly
implementation of the rules. Chairman Atkins tasked
SEC Commissioner Mark T. Uyeda to lead the
agency’s initiative to facilitate the transition, and the
SEC launched a one-stop webpage for updates, staff
statements, and other related material.
Form PF
On September 17, 2025, the SEC, along with the CFTC,
extended until October 1, 2026, the compliance date
of amendments to Form PF. In 2024, the Commissions
adopted amendments to Form PF, and the initial
compliance date of these amendments was March 12,
2025. The Commissions had extended the dates twice
previously to address transitional challenges brought to
our attention by market participants.
FORM PF
A confidential reporting form for certain
SEC-registered investment advisers to
private funds.
On January 20, 2025, President Trump signed a
Presidential Memorandum directing agencies to:
consider postponing (for 60 days from the date of
the Memorandum) the effective date of rules that had
not yet taken effect for the purpose of reviewing any
questions of fact, law, and policy that they may raise;
consider further delaying—or taking other actions
to further delay—beyond 60 days, where necessary,
to continue to review these questions of fact, law,
and policy; and where warranted, to provide notice
and take further appropriate action.
To provide time for the Commissions to complete
their review in accordance with the Presidential
Memorandum, the Commissions granted a further
compliance date extension to October 1, 2026.
Names Rule
On March 14, 2025, the SEC announced a six-month
extension of the compliance dates for amendments
adopted in September 2023 to the Investment Company
Act “Names Rule,” which addresses fund names likely
to mislead investors about a fund’s investments and
risks. The compliance date for larger fund groups was
extended from December 11, 2025, to June 11, 2026,
and the compliance date for smaller fund groups was
extended from June 11, 2026, to December 11, 2026.
The extension is designed to balance the investor benefit
of the amended Names Rule framework with funds’
needs for additional time to implement the amendments
properly, develop, and finalize their compliance systems,
and test their compliance plans.
Daily Reserve Computation Requirement
On June 25, 2025, the SEC extended until June 30,
2026, the compliance date for the amendments to Rule
15c3-3 (the broker-dealer customer protection rule) that
the Commission adopted on December 20, 2024. The
amendments require certain broker-dealers to increase
the frequency of required reserve computations under
Rule 15c3-3 from weekly to daily. The compliance
date for these required daily reserve computations
was originally December 31, 2025. This extension
will provide more time for broker-dealers to make any
necessary systems or operational changes to implement a
daily computation requirement and test their new daily
processes for compliance.
SEC Staff Numbers
The SEC’s offices and divisions have decreased
headcount by 17 percent since the beginning of the
fiscal year. These departing SEC staff members elected
to take advantage of the Administration’s Fork in the
Road, Voluntary Early Retirement Authority, Voluntary
Separation Incentive Payments, or left to pursue other
opportunities. Today, the SEC has approximately
4,000 employees and 2,300 contractors.
Technology Review and
Optimizing Efficiency
The SEC began a process to review its technology
infrastructure and contractual obligations with the goal
of optimizing efficiency and eliminating redundancy.
Chairman Atkins has also directed the initiation of a
comprehensive review of the SEC’s Electronic Data
Gathering, Analysis, and Retrieval (EDGAR) system
to ensure for data integrity.
MANAGEMENT’S DISCUSSION AND ANALYSIS | 11
FINANCIAL HIGHLIGHTS
This section provides an analysis of the financial
position, results of operations, and the underlying
causes for significant changes in balances presented
in the SEC’s FY 2025 financial statements.
As described further below, the SEC’s finances in
FY 2025 have several main components:
• An annual appropriation from Congress;
• Securities transaction fees, charged in accordance
with Section 31 of the Securities Exchange Act of
1934 (Exchange Act), which offset the agency’s
annual appropriation;
• Securities registration, tender offer, and merger
fees (also called filing fees), of which $50 million
was deposited into the Securities and Exchange
Commission Reserve Fund (Reserve Fund) each
year. The Reserve Fund provided resources up
to $100 million each fiscal year to pay for SEC
expenses, and were not subject to annual
appropriation or apportionment;
• Disgorgement and penalties ordered and collected
from violators of the securities laws, some of which
are then returned to harmed investors and the
balances are transferred to the U.S. Treasury General
Fund; and
• The SEC Investor Protection Fund (IPF), which is
funded through disgorgement and penalties not
distributed to harmed investors, and which is used
to make payments to whistleblowers who give
tips to aid the SEC’s enforcement efforts in certain
circumstances, as well as to cover the expenses of the
SEC Office of Inspector General’s (OIG) Employee
Suggestion Program.
12 | 2025 SEC AGENCY FINANCIAL REPORT
Sequestration Order for FY 2025
On March 1, 2013, the President issued the
Sequestration Order. As determined by the Office of
Management and Budget (OMB), for FY 2025, the
Sequestration Order was applicable to mandatory
appropriations, which included the Reserve Fund
and the IPF.
Reserve Fund
The budget authority of $50 million was reduced by
5.7 percent, or $3 million.
IPF
The budget authority of $385 million was reduced
by 5.7 percent, or $22 million.
Overview of Financial Position
Chart 1.1 | 2025 Assets by Type
Assets. At September 30, 2025, the SEC’s total assets
were $15.5 billion.
Fund Balance with Treasury increased due to a
$1.5 billion increase in Section 31 fees collected
during FY 2025 compared to the previous fiscal
year as a result of a higher fee rate in effect through
mid-May of FY 2025 compared to the same period of
the previous fiscal year. During FY 2024, the fee rate
was adjusted from $8 per million on May 22nd to
$27.80 per million. This rate was in effect through
May 13, 2025. Also impacting the fee collections was
an 18.6 percent increase in fee volume through May
of FY 2025 compared to the previous fiscal year.
1%
Accounts
Receivable, Net
2%
Investments—
Investor
Protection Fund
2%
Property and
Equipment, Net
and Other Assets
29%
Investments—
Disgorgement
and Penalties Fund
66%
Fund Balance
with Treasury
Table 1.1 | Assets as of September 30, 2025
Federal investments increased by $646 million mostly
due to investments related to orders established on
behalf of harmed investors during FY 2025.
Accounts Receivable, Net decreased by $667 million
primarily due to a $364 million decrease in Section 31
fees receivable as a result of the lower fee rate in effect
for September of 2025. During FY 2025, the fee rate
was adjusted from $27.80 per million on May 14th
to $0 per million. Also contributing to the decrease
was a reduction in disgorgement- and penaltiesrelated receivables.
(DOLLARS IN MILLIONS)
Fund Balance with Treasury
Investments—Disgorgement and Penalties Fund
2025
$ 10,256
4,420
Investments—Investor Protection Fund
333
Accounts Receivable, Net
211
Property and Equipment, Net
291
Other Assets
19
Total Assets
$ 15,530
MANAGEMENT’S DISCUSSION AND ANALYSIS | 13
Liabilities. At September 30, 2025, the SEC’s total
liabilities were $6.1 billion.
For the assets received resulting from enforcement
judgments, the SEC recognizes a corresponding
liability, which is either custodial if the collections are
transferred to the U.S. Treasury General Fund or the
IPF, or governmental if the collections are held pending
distribution to harmed investors.
Liability for Disgorgement and Penalties increased,
mostly due to orders established on behalf of harmed
investors during FY 2025.
Accounts Payable decreased, mostly due to a
$105 million decrease in whistleblower awards
payable as of September 30, 2025, compared to the
previous fiscal year.
Custodial Liability decreased, mostly due to the
reduction in receivables established in FY 2024
and collection of amounts due.
Ending Net Position. The SEC’s net position,
which includes both unexpended appropriations and
the cumulative results of operations, was $9.4 billion
as of September 30, 2025.
14 | 2025 SEC AGENCY FINANCIAL REPORT
Chart 1.2 | 2025 Liabilities by Type
1% Registrant
Deposits
Accounts
1% Payable
2%
Accrued Payroll
8%Contingent Liability
3% Lease Liability
1% Other Liabilities
and Benefits
1%
Custodial Liability
83%
Liability for
Disgorgement
and Penalties
Table 1.2 | Liabilities as of September 30, 2025
(DOLLARS IN MILLIONS)
Liability for Disgorgement and Penalties
2025
$ 5,124
Custodial Liability
19
Accrued Payroll and Benefits
178
Accounts Payable
72
Registrant Deposits
69
Contingent Liability
498
Lease Liability
173
Other Liabilities
9
Total Liabilities
$ 6,142
Results of Operations
Earned Revenues. Total Earned Revenues for the
year ended September 30, 2025, were $4.4 billion.
Fees paid under Section 31 of the Exchange Act remain
at the prior fiscal year-end rate until 60 days after the
date of enactment of a regular appropriation in the
current fiscal year. Due to the Section 31 fee rate of
$27.80 per million, and FY 2025 securities transaction
volume, offsetting collections resulting from Section 31
transaction fees surpassed the SEC’s Budget Authority
of $2.2 billion as of February 2025. Therefore, in
May 2025, 60 days after the enactment of the 2025
regular appropriation, the fee rate was lowered to $0
for the rest of the fiscal year.
Section 31 fee revenue was the largest source of
revenue for the SEC, totaling $3.3 billion. This
included $3.7 billion in Section 31 collections and a
$400 million reduction in Section 31 receivables.
FY 2025 collections in excess of budget authority
resulted in $1.5 billion in collections precluded
from obligation.
The filing fee rate for securities registration, tender
offer, and merger fees was set at $153.10 per million in
transaction volume during FY 2025. The Commission
must set rates for the fees paid under Section 6(b)
to levels that the Commission projects will generate
collections equal to annual statutory target amounts.
The statutory target for FY 2025 is $865 million
effective the first day of the fiscal year.
Reserve Fund. Section 991(e) of the Dodd-Frank
Wall Street Reform and Consumer Protection Act of
2010 (Dodd-Frank Act) authorized the creation of a
Reserve Fund. Funded from filing fee collections, the
SEC has historically deposited up to $50 million per
fiscal year, and the fund cannot hold more than $100
million in total each fiscal year. Excess filing fees are
deposited to the U.S. Treasury General Fund. During
FY 2025, Public Law 119-21 was enacted, which
closes the SEC’s Reserve Fund effective October 1,
2025. Existing Reserve Fund obligations and associated
Table 1.3 | Earned Revenues
For the year ended September 30, 2025
2025
(DOLLARS IN MILLIONS)
Section 31 Securities Transaction Fees
$
3,328
Securities Registration, Tender Offer,
and Merger Fees (Filing Fees)
Total Earned Revenues
1,027
$
4,355
Chart 1.3 | 2025 Filing Fee Revenue
(DOLLARS IN MILLIONS)
$50
Reserve Fund
(Deposits + Ant.
Deposits + Net
Seq./Resc.)
$977
U.S. Treasury
General Fund
property and equipment were transferred into the SEC’s
salaries and expenses fund during the fourth quarter of
FY 2025.
For the year ended September 30, 2025, filing fee
revenues totaled $1.0 billion. In FY 2025, $50 million
of filing fee revenues was deposited into the Reserve
Fund, of which $3 million was sequestered. The excess
of $977 million was earned on behalf of the U.S.
Treasury General Fund.
Obligations incurred for the Reserve Fund during
FY 2025 totaled $13 million, and the remaining
unobligated balance totaled $44 million.
MANAGEMENT’S DISCUSSION AND ANALYSIS | 15
Program Costs. Total Program Costs were
$2.4 billion for the year ended September 30, 2025.
FY 2025 program costs were comprised of $1.6 billion
in salaries and benefits, $696 million in non-payroll
contractual costs, and $35 million in net costs related to
whistleblowers made from the IPF.
In FY 2025, to comply with Presidential mandates to
streamline the federal workforce, the Office of Personnel
Management established the Deferred Resignation
Program (DRP) allowing employees to voluntarily
resign effective no later than September 30, 2025.
Upon acceptance of resignation, employees were
placed on administrative leave, maintaining their pay
and benefits. The SEC had 170 employees participate
at a cost of $37.1 million.
Following the conclusion of the DRP acceptance
period, the SEC also provided all employees with
a Voluntary Early Retirement Authority (VERA)/
Voluntary Separation Incentive Payment (VSIP)
opportunity. The SEC offered one additional VERA/
VSIP opportunity at fiscal year-end to all managers
within the agency as well as to staff within the Office
of Information Technology who expressed interest by
September 30th. VERA lowers the retirement age or
years of service requirement for eligible employees, while
VSIP offers payment in exchange for separation from
the SEC. As of September 30, 2025, 472 employees
participated at a cost of $23.9 million.
Budgetary Resources
For the year ended September 30, 2025, the SEC’s
total budgetary resources equaled $3.1 billion.
Unobligated Balance from Prior Year Budget
Authority. The primary sources of unobligated
balance brought forward for FY 2025 consisted of the
cancellation of the headquarters’ lease contract by the
U.S. Government Services Administration, special lease
funding carried forward, and the IPF carry forward.
16 | 2025 SEC AGENCY FINANCIAL REPORT
Chart 1.4 | Program Costs
(DOLLARS IN MILLIONS)
$2000
$1600
$1,635
$1200
$731
$800
$400
$0
Salary and Benefit Expenses
Other Expenses
Appropriations and Spending Authority from
Offsetting Collections. For FY 2025, the SEC’s
appropriation, per H.R. 1968 – Full-Year Continuing
Appropriations Act, 2025, Public Law PL-119-47,
totaled $2.2 billion. The total appropriation included
$2.1 billion of regular appropriation, and $39.7 million
for move, replication, and related costs associated
with replacement leases for the Commission’s office
facilities. The current year appropriation is available
until expended.
For FY 2025, the SEC collected $3.7 billion in Section
31 transaction fees as of September 30, 2025, resulting
in a full budget authority of $2.2 billion being collected
on, and returned to, Treasury, and $1.5 billion in
collections in excess of budget authority that are
precluded from obligation by the SEC.
Investor Protection Fund
The SEC prepares standalone financial statements
for the IPF as required by the Dodd-Frank Act.
The IPF was established in FY 2010 to provide
funding for a Whistleblower Award Program, and to
finance the operations of the SEC OIG’s Employee
Suggestion Program.
For the year ended September 30, 2025, the balance of
the IPF was $318 million.
During FY 2025, the SEC deposited $15 million from
investment interest in Treasury securities. The SEC paid
$171 million to whistleblowers, while $12 million in
awards were accrued as payable.
Also, $29 million in the prior fiscal year sequestration
was returned to the IPF and $22 million in FY 2025
funding was sequestered, resulting in a net sequestration
totaling $7 million.
Limitations of the Financial Statements
The financial statements are prepared to report the
financial position, financial condition, and results of
operations, consistent with the requirements of 31
U.S.C. § 3515(b). The statements are prepared from
records of Federal entities in accordance with Federal
generally accepted accounting principles (GAAP) and
the formats prescribed by OMB. Reports used to
monitor and control budgetary resources are prepared
from the same records. Users of the statements are
advised that the statements are for a component of the
U.S. Government.
Table 1.4 | Investor Protection Fund Activity
For the year ended September 30, 2025
2025
(DOLLARS IN MILLIONS)
Balance of Fund at Beginning of Fiscal Year, October 1
$
362
Amount Deposited Into or Credited to the Fund During the Fiscal Year
15
Amount Awarded but Unpaid During the Fiscal Year
105
Amount Paid from the Fund During the Fiscal Year to Whistleblowers
(171)
Net Sequestration
Balance of the Fund at the End of the Reporting Period*
7
$
318
*Note: Balance of the Fund does not include Anticipated Resources
MANAGEMENT’S DISCUSSION AND ANALYSIS | 17
PERFORMANCE HIGHLIGHTS
The SEC’s performance data provides a foundation
for both programmatic and organizational decision
making, and is critical for ensuring the work of the
agency remains aligned with its mission. The SEC is
committed to using performance management best
practices to promote greater accountability. In addition
to the SEC Programs and Program Descriptions table,
this section also provides a summary table of all agency
performance metrics and highlights a few key performance metrics for FY 2025. Overall, it outlines the
SEC’s program and performance planning framework
and highlights the agency’s progress toward reaching its
performance targets.
The SEC’s FY 2025 Annual Performance Report (APR)
will be issued with the agency’s FY 2027 Congressional
Budget Justification Report and will provide a complete
discussion of the agency’s performance goals, data
sources, performance results and trends, and information
about internal reviews and evaluations. The below
summary of the SEC’s verification and validation of
all performance data will also be included in the APR.
The SEC’s APR is expected to be available in 2026
at SEC.gov/reports.
Verification and Validation of
Performance Data
The SEC’s programs require accurate data to
properly assess program performance and make
sound management decisions. To ensure data is
correct, a system of data verification and validation
is used. Data verification is a systematic process for
evaluating a set of data against a set of standards
to ascertain its completeness, correctness, and
consistency using the methods and criteria defined in
the project documentation. Data validation follows
18 | 2025 SEC AGENCY FINANCIAL REPORT
the data verification process in an effort to ensure that
performance data are free of systematic error or bias,
and that what is intended to be measured is actually
measured. Together, these processes are used to evaluate
whether the information has been generated according
to specifications, satisfies acceptance criteria, and is
appropriate and consistent with its intended use.
Below is a list of steps taken to ensure the performance
data presented in this report is complete, reliable,
and accurate.
1. The agency develops performance goals through its
strategic planning process.
2. The SEC’s divisions and offices provide:
• The procedures used to obtain assurance as
to the accuracy and reliability of the data;
• The data definitions for reference;
• Documentation and explanation of the
performance goal calculations; and
• The sources of the underlying data elements.
3. The performance data is approved by the division
directors and office heads. This process ensures that
the data used in the calculation of performance goals
is accurate and reliable, and that internal control is
maintained throughout the approval process.
Program and Performance Framework
To enhance transparency, this section now includes the
SEC Programs and Program Descriptions table, a link to
the Statement of Net Cost, and key performance results
by program. The SEC is committed to providing readers
with an integrated view of the connection between
program costs and performance data.
PROGRAMS
The SEC organizes its divisions and offices within the 10 major programs outlined below, which aligns with
how the SEC presents its costs of operations by programs in the Statement of Net Cost on page 43. This is
also consistent with the presentation used by the agency in submitting its budget requests.
Table 1.5 | SEC Programs and Program Descriptions
ENFORCEMENT
Division of Enforcement (ENF)
Investigates and brings civil charges in federal district court or in administrative proceedings
based on violations of the federal securities laws. An integral part of this program’s function is
seeking penalties and the disgorgement of ill-gotten gains in order to return funds to harmed
investors. Also within this program is the Office of the Whistleblower, which rewards individuals who provide the agency with tips that lead to successful enforcement actions.
EXAMINATIONS
Division of Examinations (EXAMS)
Conducts examinations of registrants such as investment advisers, investment companies,
broker-dealers, self-regulatory organizations (SRO), transfer agents, and clearing agencies.
CORPORATION FINANCE
Division of Corporation Finance (CF)
Helps investors gain access to materially complete and accurate information about companies and the securities they offer and sell, to facilitate capital formation and to deter fraud and
misrepresentation in the public offering, trading, voting, and tendering of securities.
TRADING AND MARKETS
Division of Trading and Markets (TM)
Supervises major market participants and conducts activities to maintain fair, orderly, and
efficient standards that foster investor protection and confidence in the markets.
INVESTMENT MANAGEMENT
Division of Investment
Management (IM)
Administers the Investment Company Act of 19401 and Investment Advisers Act of 1940,2 which
includes developing regulatory policy for investment companies and for investment advisers,
monitoring for risks and trends, reviewing regulatory and financial disclosures for compliance
with regulatory requirements, and providing guidance to relevant market participants.
ECONOMIC AND RISK ANALYSIS
Division of Economic and
Risk Analysis (DERA)
Provides economic analyses as part of the Commission’s rulemaking process and assists
its rule review, examination, and enforcement programs with data-driven, risk-based
analytical methods.
GENERAL COUNSEL
Office of the General Counsel (OGC)
1
2
Serves as the chief legal officer of the Commission and provides independent legal analysis
and advice to the Chairman, Commissioners, and operating divisions on all aspects of
Commission activities. This office also defends the Commission in federal district courts.
More information about the Investment Company Act of 1940 can be found at SEC.gov/about/about-securities-laws#invcoact1940.
More information about the Investment Advisers Act of 1940 can be found at SEC.gov/about/about-securities-laws#invadvact1940.
MANAGEMENT’S DISCUSSION AND ANALYSIS | 19
Table 1.5 | Continued from previous page
OTHER PROGRAM OFFICES
Office of Administrative
Law Judges (OALJ)
Conducts public hearings throughout the United States in a manner similar to non-jury trials in the
federal district courts. As independent adjudicators, administrative law judges issue initial decisions
on allegations set out in Commission Orders Instituting Proceedings, issue subpoenas, hold
prehearing conferences, and rule on motions and the admissibility of evidence.
Office of the Advocate for
Small Business Capital
Formation (OASB)
Works with small businesses and their investors to understand their capital formation issues
through education and outreach, analyzes the potential impact of proposed SEC and SRO rules
and regulations likely to significantly affect small businesses and their investors, and helps small
businesses and their investors resolve issues with the SEC and SROs by recommending policy
changes to Congress and the Commission.
Office of the Chief
Accountant (OCA)
Establishes accounting and auditing policies, and works to improve the professional performance
of public company auditors to ensure that financial statements used for investment decisions are
presented fairly and have credibility.
Office of Credit Ratings (OCR)
Administers the rules of the Commission with respect to the practices of nationally recognized
statistical rating organizations (NRSRO) in determining ratings, protects the users of credit ratings,
promotes accuracy in credit ratings issued by NRSROs, and ensures that such ratings are not unduly
influenced by conflicts of interest.
Office of International
Affairs (OIA)
Advances international regulatory, supervisory, and enforcement cooperation; promotes
converged high regulatory standards worldwide; and facilitates technical assistance programs
in foreign countries.
Office of the Investor
Advocate (OIAD)
Helps investors resolve significant problems with the SEC or with SROs, and identifies areas in which
investors would benefit from changes to federal laws or to SEC regulations or SRO rules.
Office of Investor Education
and Advocacy (OIEA)3
Serves investors who complain to the SEC about investment fraud or the mishandling of their investments by securities professionals, ensures the views of retail investors inform the Commission’s
regulatory policies and disclosure programs, and works to improve investors’ financial literacy.
Office of Municipal
Securities (OMS)
Oversees the municipal securities market and administers the agency’s rules pertaining to municipal
securities brokers and dealers, advisors, investors, and issuers. This office also coordinates with the
Municipal Securities Rulemaking Board on rulemaking and enforcement actions.
AGENCY DIRECTION AND ADMINISTRATIVE SUPPORT
EDGAR Business Office (EBO)
Provides direct executive-level oversight for the ongoing transformation of specific functions and
programs to include business ownership of the Electronic Data Gathering, Analysis, and Retrieval
(EDGAR) system and the EDGAR modernization program initiative.
Office of Acquisitions (OA)
Provides advice on acquisition planning, development, and sourcing; awarding contracts and
interagency agreements; and ensures contract terms and conditions are met through timely
contract closeouts and de-obligation of funds.
Office of the Chairman
Oversees all aspects of agency operations. The Chairman and Commissioners are responsible for
reviewing and approving enforcement cases as well as overseeing the development, consideration,
and execution of policies and rules.
Office of the Chief Data
Officer (OCDO)
Enables data analytics to support enforcement, examinations, policymaking, and other agency
activities, and supports the agency to ensure effective and efficient data security.
Office of the Chief Operating
Officer (OCOO)
Provides strategic leadership and operational oversight of the SEC’s core mission support activities
and compliance with administrative requirements from Congress and the Executive Branch.
Office of Equal Employment
Opportunity (OEEO)
Strives to enhance access to employment opportunities for the best and brightest talent, and to
foster a fair and equitable work environment in compliance with federal laws and SEC standards.
3
In FY 2026, the SEC’s Office of Investor Education and Advocacy was renamed the Office of Investor Education and Assistance.
20 | 2025 SEC AGENCY FINANCIAL REPORT
Table 1.5 | Continued from previous page
AGENCY DIRECTION AND ADMINISTRATIVE SUPPORT (CONTINUED)
Office of the Ethics
Counsel (OEC)
Administers the Commission’s Ethics Program and interprets the SEC’s Supplemental Ethics Rules
as well as government-wide ethics laws, rules, and regulations.
Office of Financial
Management (OFM)
Oversees the agency’s financial systems and internal controls over financial reporting, prepares
financial statements and reports, manages the formulation and execution of the SEC’s annual
budget, and coordinates the agency’s performance and cost reporting.
Office of Human
Resources (OHR)
Assists with recruitment, staffing, organizational development, leadership and employee development, compensation and benefits administration, position classification, workforce planning, and
labor relations.
Office of Information
Technology (OIT)
Maintains responsibility for the Commission’s infrastructure operations and engineering, user
support, program management, capital planning, cybersecurity, and enterprise architecture.
Office of Legislative
and Intergovernmental
Affairs (OLIA)
Serves as the liaison between the SEC and Congress, and is responsible for responding to
requests from Congress for information related to agency programs and legislation affecting the
SEC or its mission.
Office of Minority and Women
Inclusion (OMWI)
Implements Section 342 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Office of Public Affairs (OPA)
Assists the Commission in making the work of the SEC is accessible to the public, understandable
to investors, and accountable to taxpayers.
Office of the Secretary (OS)
Reviews all documents issued by the Commission, schedules and coordinates Commission
meetings, prepares and maintains records of Commission actions, and receives and tracks filings
in administrative proceedings.
Office of Support
Operations (OSO)
Processes requests under the Freedom of Information Act and the Privacy Act; maintains all
agency records in accordance with the Federal Records Act; oversees the security and safety
of SEC facilities; and manages property, equipment, and overall building operations.
INSPECTOR GENERAL
Office of Inspector
General (OIG)
Conducts audits of the SEC’s programs and operations, and investigates allegations of misconduct
by staff or contractors. This is an independent office whose mission is to detect fraud, waste, and
abuse, and promote integrity, economy, efficiency, and effectiveness throughout the agency’s
programs and overall operations.
MANAGEMENT’S DISCUSSION AND ANALYSIS | 21
PERFORMANCE AT A GLANCE
The following table summarizes the status of the SEC’s performance—as measured by each individual performance
goal (PG)—in support of the agency’s mission.
Program
Performance Goal
Measurement
ENF
PG 1. Percentage of enforcement actions in which the Commission
Percentage
ENF
PG 2. Percentage of Fair Fund and disgorgement fund plans that
Percentage
EXAMS
PG 3. Percentage of investment advisers and broker-dealers
Investment advisers
EXAMS
CF
obtained relief on one or more claims
have distributed 80 percent of the available funds for distribution
within 24 months of the approval of the distribution plan
examined during the year
PG 4. Number of regulatory initiatives to improve investor disclosure
Broker-dealers
Division of Corporation Finance
IM
Division of Investment Management
TM
Division of Trading and Markets
CF
IM
TM
PG 5. Percentage of disclosure-based regulatory initiatives that
consider whether it would be appropriate to include a provision
to structure disclosures (to the extent that the benefits justify the
economic costs) to enhance comparability
Division of Corporation Finance
Division of Investment Management
Division of Trading and Markets
OIAD
PG 6. Investor Engagement Activities
Activities
CF
PG 7. Number of regulatory initiatives that enhance transparency
Division of Corporation Finance
IM
in private markets or update the disclosure framework to reflect
evolving technologies, business models, and capital markets
TM
OIA
Division of Investment Management
Division of Trading and Markets
PG 8. Number of supervisory cooperation requests from foreign
Requests from foreign authorities
OIA
authorities for SEC assistance and SEC requests for assistance on
supervisory cooperation from foreign authorities
TM
PG 9. Percentage of supervisory engagements with broker-dealers
Percentage
EXAMS
PG 10. Number of examinations that request information related to
Examinations
EXAMS
PG 11. Percentage of Systemically Important Financial Market
Percentage
OIEA
PG 12. Number of new investor education materials on emerging
New investor education materials issued
OIEA
and clearing agencies to address systemic and infrastructure risks
an entity’s information security
Utilities examined by the examinations program
and popular investment topics
22 | 2025 SEC AGENCY FINANCIAL REPORT
SEC requests for assistance
Users indicating a positive change
FY 2025
Program
Performance Goal 1,2
Measurement
FY 2025
N/A
OEEO
PG 16. Equal Employment Opportunity Compliance – Sentiment
and Assessment
Percentage of “yes” (or N/A) responses to
EEOC questions3
OIT
PG 18. Percentage of Plan of Action and Milestones (POA&Ms)
Percentage
OIT
PG 19. Percentage of SEC information systems encrypting data-at-
Data-at-rest
OIT
OCRO5
OCRO
closed within six months from identification
rest and encrypting data-in-transit, as reported per FISMA4
Data-in-transit
PG 20. Timely completion of corrective actions responsive to
audit findings
Submitted within 12 months
Not yet submitted within 12 months
OIT
PG 21. Number of innovative or analytical models, tools,
Number
OIT
PG 22. Percentage of FISMA-reportable systems that are current
Percentage
capabilities, platforms, and other solutions deployed or made
available to SEC staff
(not legacy systems)
Note: For more detailed information, please refer to the SEC’s FY 2025 APR, which will be available in 2026 at SEC.gov/reports.
Target met
1
2
3
4
5
Target not met
In accordance with guidance provided by the Office of Personnel Management, the Federal Employee Viewpoint Survey (FEVS) was not administered in
FY 2025; as such, Performance Goal 13, Results of Federal Employee Viewpoint Survey, Performance Goal 16, Data Point 1, Positive Rating on FEVS Q8
(I can disclose a suspected violation of any law, rule, or regulation without fear of reprisal), and Performance Goal 17, Employee Views on Intra-Agency
Cooperation, have been removed.
In accordance with Executive Order 14151, Ending Radical and Wasteful Government DEI Programs and Preferencing, Performance Goal 14, Index
Results from SEC Federal Employee Viewpoint Survey: Diversity, Opportunity, and Employee Inclusion, and Performance Goal 15, Diversity Outreach,
have been removed.
As prescribed by the Equal Employment Opportunity Commission, 156 questions for evaluating whether agencies have in place policies and procedures
necessary to support a Model EEO Program. Data will be published in 2026.
Federal Information Security Modernization Act
Office of the Chief Risk Officer
MANAGEMENT’S DISCUSSION AND ANALYSIS | 23
SELECT METRICS
Below are key performance metrics that highlight major achievements and efforts in alignment with the
agency’s mission.
Chart 1.5
Percentage
PG 2. Percentage of Fair Fund and disgorgement fund plans that have distributed 80 percent of the available funds for
distribution within 24 months of the approval of the distribution plan
100
50
0
95%
98%
96%
91%
91%
85%
90%
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
Plan
FY 2025
Actual
Description: In addition to other types of relief, the SEC may seek orders requiring parties to disgorge any money obtained through
wrongdoing. The SEC also is empowered to seek civil penalties for violations of the securities laws. Where appropriate, the SEC has
sought to return disgorged funds to harmed investors and, as a result of the Fair Funds provisions in law, to combine amounts paid as
penalties with disgorged funds, or to create a Fair Fund from penalties only, to reduce losses to injured parties and to maximize funds
available for distribution. This metric identifies the percentage of distribution plans that reached a critical mass during the fiscal year and
within 24 months of the approval of the distribution plan. The distribution plan includes the timeline and procedures required to return the
funds to injured investors. This reflects Commission-wide efforts to implement plans to return money to investors quickly. Any funds not
returned to investors are sent to the U.S. Treasury or the Investor Protection Fund established pursuant to Section 21F(g) of the Securities
Exchange Act of 1934. Neither disgorgement nor penalties are used for the SEC’s own expenses.
Target: Exceeded
Responsible Division/Office: Division of Enforcement
Data Source: Case Tracking System for the Division of Enforcement
Investor protection is a key component of the SEC’s
mission, and a distribution payment is tangible evidence
that the SEC provides protection to harmed investors.
When an enforcement action results in the collection of
monetary relief and harmed investors can be identified
and contacted and their harm quantified, the Office
of Distributions undertakes an effort to distribute the
collected funds. Once it is determined that a distribution
is feasible, the Office of Distributions is responsible for
managing the distribution. The distribution process
involves creating a Disgorgement Fund or Fair Fund;
appointing a tax administrator; soliciting and then
appointing a fund administrator or distribution agent;
developing and implementing a distribution plan for
either Commission or court approval; distributing
and reconciling payments to harmed investors; and
preparing a final fund accounting for approval and
termination of the case.
24 | 2025 SEC AGENCY FINANCIAL REPORT
The agency’s goal is to return funds to harmed
investors in a timely manner once funds have been
received. This metric identifies the percentage of Fair
Fund and Disgorgement Fund plans that have distributed 80 percent of the available funds for distribution
within 24 months of the approval of the distribution
plan. In FY 2025, the Office of Distributions exceeded
the target by 5 percentage points.
Going forward, the Division of Enforcement will
continue to prioritize the timeliness and efficiency
of distributing funds, which have been enhanced by
centralizing the distributions function to build expertise
and improve speed and efficiency in the distribution
process, and by implementing various process improvements to better monitor and track distribution deadlines.
Table 1.6
PG 12. Number of new investor education materials on emerging and popular investment topics
Fiscal Year
FY
2020
FY
2021
FY
2022
FY
2023
FY
2024
FY 2025
Plan
FY 2025
Actual
New Investor Education
Materials Issued
Prior-year data
not available
16
24
16
16
18
Users Indicating a
Positive Change
Prior-year data
not available
94%
91%
90%
90%
92%
Description: Through the Office of Investor Education and Advocacy (OIEA),1 and often in conjunction with other organizations, the SEC
issues Investor Alerts and Bulletins to inform investors about different permutations of fraud, new investment products, and other topical
issues. This metric measures: (a) the number of new investor education materials issued by OIEA; and (b) the percentage of users who
indicated that the investor education materials may positively impact their behavior in the future.
Target: New Investor Education Materials Issued – Exceeded; Users Indicating a Positive Change – Exceeded
Responsible Division/Office: Office of Investor Education and Advocacy
Data Source: Investor.gov; Qualtrics Experience Management Platform
In response to significant developments and trends
impacting retail investors, the Office of Investor
Education and Advocacy (OIEA) led investor
education initiatives focusing on different segments of
the population, from students and teachers to older
investors, military service members, and veterans. The
initiatives focused on equipping these key audiences
and other investors with information and tools to make
sound investment decisions, including publishing new
investor education materials on emerging and popular
investment topics. To support these efforts, OIEA
continued to gather information regarding the behavior
of individual investors, the type of information they
need and use when making investment decisions, and
the usefulness of the SEC’s investor education efforts and
related programs.
OIEA issued 18 Investor Alerts and Bulletins to warn
investors of possible fraudulent schemes and educate
them on other important investing topics. For example,
OIEA and the FBI’s Criminal Investigative Division
1
warned investors about a significant uptick in tips,
complaints, and referrals involving impersonations
of investment professionals, including registered
representatives and investment adviser representatives.
In collaboration with the Financial Industry Regulatory
Authority (FINRA) and the North American Securities
Administrators Association (NASAA), OIEA also
issued an Investor Bulletin to urge investors to consider
adding a trusted contact to their brokerage account. In
response to the floods in Texas and hurricanes Helene
and Milton, OIEA issued Investor Alerts on natural
disasters and investment scams to remind investors that
bad actors may use natural disasters to lure victims
into investment scams, and that fraudsters may directly
target individuals receiving money from insurance
companies or other sources. Ninety-two percent of
respondents to Investor.gov’s customer satisfaction
survey indicated that the information from Investor
Alerts and Bulletins may positively impact them in
the future.
In FY 2026, the SEC’s Office of Investor Education and Advocacy was renamed the Office of Investor Education and Assistance.
MANAGEMENT’S DISCUSSION AND ANALYSIS | 25
Chart 1.6
PG 20. Timely completion of corrective actions responsive to audit findings
SUBMITTED WITHIN 12 MONTHS
Percentage
100
75
68%
82%
81%
65%
50
25
0
FY 2023
FY 2024
FY 2025 Plan
FY 2025 Actual
NOT YET SUBMITTED WITHIN 12 MONTHS
96%
Percentage
100
75
88%
60%
60%
50
25
0
FY 2023
FY 2024
FY 2025 Plan
FY 2025 Actual
Note: Data for FY 2020 – 2022 are not available.
Description: This metric consists of two data points measuring the SEC’s ability to timely develop, complete, and submit for closure
corrective actions responsive to Government Accountability Office (GAO) or Office of Inspector General (OIG) recommendations:
(1) the percent of GAO and OIG audit recommendations submitted for closure within 12 months of the date of the recommendations’
issuance; and (2) the percent of GAO and OIG audit recommendations not yet submitted for closure that are within 12 months of the
recommendations’ issuance.
Target: Submitted Within 12 Months – Exceeded; Not Yet Submitted Within 12 Months – Exceeded
Responsible Division/Office: Office of the Chief Risk Officer
Data Source: Audit Management System (Archer)
In accordance with Office of Management and Budget
Circular A-50, Audit Follow-Up, the SEC ensures
that prompt and proper corrective action is taken
based on auditors’ recommendations to improve
the effectiveness and efficiency of agency operations.
Once a corrective action has been completed in
response to a recommendation from the U.S.
Government Accountability Office (GAO) or the SEC
Office of Inspector General (OIG), the SEC submits
documentation to GAO or the OIG to verify that agreed
upon corrective actions have been implemented to close
the recommendation.
In FY 2025, the SEC submitted 81 percent of audit
recommendations for closure within 12 months of
receipt, thus exceeding the target goal of 65 percent.
26 | 2025 SEC AGENCY FINANCIAL REPORT
Moreover, at the end of FY 2025, 88 percent of
recommendations to the SEC that had not yet been
submitted to GAO or the OIG for closure were less than
one year old, exceeding the 60 percent target goal.
The agency’s success on this performance goal is
attributed to effective cross-organizational cooperation
and mature governance efforts. Agency progress is
monitored using near-real-time tracking systems and
reported during routine status meetings that provide
key stakeholders and agency leadership with ongoing
awareness of progress toward closing corrective
actions. Timely monitoring and reporting also provides
leadership with the opportunity to adjust priorities and
resources, as necessary, in response to audit findings.
ANALYSIS OF SYSTEMS, CONTROL,
AND LEGAL COMPLIANCE
In FY 2025, the SEC demonstrated its continued
commitment to maintaining strong internal controls.
Internal control is an integral component of effective
agency management, providing reasonable assurance
that the following objectives are being achieved:
effectiveness and efficiency of operations, reliability of
reporting, and compliance with laws and regulations as
outlined by the Federal Managers’ Financial Integrity
Act of 1982 (FMFIA). Guidance for implementing the
FMFIA is provided through Office of Management
and Budget (OMB) Circular A-123, Management’s
Responsibility for Enterprise Risk Management and
Internal Control, and the Appendix A, Management of
Reporting and Data Integrity Risk.
Section 963 of the Dodd-Frank Wall Street Reform
and Consumer Protection Act of 2010 (Dodd-Frank
Act) describes the responsibility of SEC management to
establish and maintain adequate internal controls and
procedures for financial reporting. Section 922 of the
Dodd-Frank Act requires the SEC to submit audited
financial statements of the Investor Protection Fund to
the Senate Committee on Banking, Housing, and Urban
Affairs, and the House of Representatives Committee
on Financial Services. The following Annual Assurance
Statement is issued in accordance with the FMFIA,
OMB Circular A-123, and the Dodd-Frank Act.
MANAGEMENT’S DISCUSSION AND ANALYSIS | 27
Annual Assurance Statement
SEC management is responsible for establishing and maintaining an effective system of
internal control that meets the objectives of the Federal Managers’ Financial Integrity Act
of 1982 (FMFIA). In accordance with OMB Circular A-123, Management’s Responsibility
for Enterprise Risk Management and Internal Control, the SEC conducted its annual
assessment of its system of internal control. Based on the results of this assessment, the
SEC can provide reasonable assurance that its system of internal control over operations,
reporting, and compliance was operating effectively as of September 30, 2025.
SEC management is also responsible for establishing and maintaining an adequate
internal control structure and procedures for financial reporting. Based on the results of
its annual assessment of internal controls, the SEC can provide reasonable assurance that
internal controls and procedures over financial reporting were operating effectively during
the year ended September 30, 2025.
The SEC also conducted reviews of its financial management systems in accordance
with OMB Circular A-123 Appendix D, Management of Financial Management
Systems—Risk and Compliance. Based on the results of these reviews, the SEC can
provide reasonable assurance that its financial management systems substantially
comply with the requirements of the Federal Financial Management Improvement
Act of 1996 (FFMIA) as of September 30, 2025.
PAUL S. ATKINS
CARYN E. KAUFFMAN
Chairman
January 9, 2026
Chief Financial Officer
January 9, 2026
28 | 2025 SEC AGENCY FINANCIAL REPORT
Management’s Assessment of
Internal Control
The Chairman and CFO’s FY 2025 Annual Assurance
Statement for FMFIA provides reasonable assurance
that the SEC’s system of internal control over
operations, financial and non-financial reporting,
financial management systems, and compliance was
operating effectively as of September 30, 2025.
A central component of the SEC’s internal control
system was the sub-assurance statement each division
or office director provided about their internal control
system and were made based on each director’s
knowledge of their division or office’s daily operations
and internal reviews, supported by control activity
testing and recommendations for improvement from
audits, investigations, and reviews conducted by the SEC
Office of Inspector General (OIG) or the Government
Accountability Office (GAO).
Also critical to management’s assessment was the
results of testing of the agency’s internal control
over financial reporting. The agency also tested the
operating effectiveness of control activities that were
found to be deficient in prior years. SEC management
analyzed the magnitude of internal control deficiencies,
both individually and in the aggregate, to determine
whether a material weakness existed in the financial
reporting processes.
Management also considers input from the agency’s
Financial Management Oversight Committee (FMOC).
The FMOC considers significant aspects of the
agency’s assessments of internal controls and advises
the Chairman as to whether the SEC had any internal
control deficiencies, either individually or in the
aggregate that were determined to be significant.
Additional sources of information utilized to assess and
inform management’s assurance about SEC’s internal
control system included:
• An entity-level evaluation of the internal control
system’s adherence to the GAO’s Standards for
Internal Control in the Federal Government;
• Reviews of the SEC’s financial management
systems under OMB Circular A-123 Appendix D,
Management of Financial Management Systems–Risk
and Compliance;
• Reports pursuant to the Federal Information
Security Modernization Act (FISMA) and OMB
Circular A-130, Managing Information as a
Strategic Resource;
• Reviews on improper payments;
• Reviews that support compliance with the
Digital Accountability and Transparency Act
of 2014 (DATA Act);
• Reports and information from other federal entities
reflecting the adequacy of internal controls; and
• Other internal reviews and self-assessments relating
to a division or office’s operations.
Enterprise Risk Management
The SEC’s Office of the Chief Risk Officer (OCRO)
leads the agency’s enterprise risk management (ERM)
efforts, and champions risk management throughout the
agency. ERM assists the agency in achieving its strategic
and operational objectives by providing an enterprisewide approach for managing the most significant risks
and challenges. Identified risks are categorized and
prioritized by the SEC’s Risk Management Oversight
Committee (RMOC). Priority risks are documented in
the SEC risk profile.
OCRO supports the Committee’s efforts with
administrative support and provides leadership and
guidance to the Committee and risk advisers on risk
management best practices.
MANAGEMENT’S DISCUSSION AND ANALYSIS | 29
The continued integration of internal control and
risk management is critical to the full implementation
and success of an enterprise risk framework. In
FY 2025, OCRO implemented guidance to promote
standardized risk management practices, resulting in
an enhanced understanding of its operational risks
and its management of those risks.
Other Reviews
The Payment Integrity Information Act of 2019
The Payment Integrity Information Act of 2019 (PIIA)
updated government-wide improper payment reporting
requirements by repealing and replacing all previous
improper payment legislation. PIIA requires agencies
to review all programs and activities they administer
to identify those that may be susceptible to significant
erroneous payments. The SEC’s risk assessments
have consistently indicated that none of the agency’s
programs are susceptible to significant improper
payments; the agency’s latest risk assessment was
conducted in the current fiscal year. The results of this
assessment continued to support the determination
that all the SEC-evaluated programs are low risk. Based
on these results, and consistent with OMB guidelines,
the SEC will not conduct another risk assessment until
FY 2028 unless one or more specific changes occur.
For additional information regarding the SEC’s
compliance with improper payments, please refer to
Payment Integrity Reporting Details in the Other
Information section of this report.
Digital Accountability and Transparency Act of
2014 (DATA Act)/Data Quality Plan (DQP)
The DATA Act (Pub. L. 113-101) was enacted to
establish government-wide financial data standards
to increase the availability, accuracy, and usefulness
of federal spending information. The DATA Act
requires federal agencies to disclose direct federal
30 | 2025 SEC AGENCY FINANCIAL REPORT
agency expenditures and link federal contract spending
information to programs of federal agencies to enable
taxpayers to track federal spending more effectively
using USASpending.gov. The SEC submitted the
mandatory monthly transmissions in FY 2025.
The current OMB Circular A-123 Appendix A
called for the creation of a DQP. The SEC has a DQP
in place, which is reviewed and updated on an annual
basis. The SEC DQP utilizes the principles of OMB
Circular A-123 Appendix A to highlight internal
controls over the related information systems that
contain spending information.
Financial Management System Conformance
The Federal Financial Management Improvement
Act of 1996 (FFMIA) requires that each agency
implement and maintain financial management
systems that comply substantially with federal financial
management systems requirements, applicable federal
accounting standards, and the U.S. Standard General
Ledger at the transaction level. Although the SEC, as
an independent agency, is exempt from the requirement
to determine substantial compliance with the FFMIA,
the agency assesses its financial management system
annually for conformance with the requirements of
OMB Circular A-123 Appendix D and other federal
financial system requirements.
Summary of Current Financial System
and Future Strategies
The FY 2025 assessment of the current financial
system demonstrated that a low-risk rating would
be appropriate, and that the agency substantially
complied with the requirements of Section 803(a) of
the FFMIA. The SEC’s utilizes a Federal Shared Service
Provider (FSSP) for its financial reporting. The agency’s
financial system, Delphi, operated by the Department of
Transportation’s Enterprise Services Center (ESC), meets
all the requirements of the FFMIA. In FY 2025, the SEC
continued to work with its FSSP, to enhance its existing
system. The SEC believes that continuing to invest in
technology-based solutions will further improve the
sustainability of the agency’s controls.
Federal Information Security
Modernization Act (FISMA)
The SEC’s Office of Information Security, under
the Office of Information Technology (OIT), leads
the agency’s cybersecurity risk management efforts
in alignment with the Federal Information Security
Modernization Act (FISMA). FISMA requires federal
agencies to develop, document, and implement an
agency-wide information security program to protect the
information and systems that support agency operations
and assets—including those provided or managed by
another agency, contractor, or third parties.
The Office of Information Security supports the agency
in achieving its strategic and operational objectives by
providing a comprehensive, enterprise-wide approach to
managing cybersecurity risks. This includes conducting
annual assessments of the SEC’s information security
and privacy programs, implementing remediation efforts
for identified vulnerabilities, and reporting compliance
to OMB.
The Office of Information Security provides oversight
for information security risks in accordance with
the National Institute of Standards and Technology
Risk Management Framework. It collaborates
with stakeholders across the agency to determine
acceptable levels of residual cybersecurity risk and
develops mechanisms and metrics to provide a shared
understanding of the SEC’s cybersecurity posture.
Identified risks are categorized and prioritized through
structured assessments, and mitigation strategies are
developed in coordination with system owners and
business units. The Office of Information Security
facilitates these efforts by managing governance
tools, tracking Plans of Action and Milestones, and
coordinating internal and external audits.
In FY 2025, the Office of Information Security made
progress in strengthening the SEC’s information security
program. This included completing information system
security assessments, conducting privacy reviews, and
delivering updated Privacy and Information Security
Awareness training to all personnel. These efforts reflect
the continued integration of internal controls and
cybersecurity risk management as critical components
of the agency’s enterprise risk framework.
Specifically, the SEC improved its cybersecurity posture
by implementing zero trust principles and controls,
including the centralization of identity and access
management, enforcement of strong authentication
through PIV credentials and cryptographic tokens,
and standardization of cloud security configurations.
The agency also began transitioning to an immutable
infrastructure model to enhance reliability and efficiency.
To safeguard sensitive data, the SEC implemented
encryption for data at rest and in transit, restricted
removable media access and non-business
communication platforms, and launched a data
protection initiative with the Office of the Chief Data
Officer. While the culmination of these efforts has
contributed to the increase in effectiveness of our
cybersecurity program, we recognize that further action
and attention are necessary to improve our security and
resilience to both known and unknown threats.
MANAGEMENT’S DISCUSSION AND ANALYSIS | 31
FINANCIAL SECTION
This section contains the SEC’s financial statements, the financial statements of the SEC’s Investor Protection Fund (IPF), and additional information for FY 2025. Information presented here
satisfies the financial reporting requirements of the Accountability of Tax Dollars Act of 2002 and
the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act).
The SEC prepares these statements and accompanying notes in compliance with U.S. generally
accepted accounting principles for the federal government and OMB Circular A-136, Financial
Reporting Requirements.
SEC Financial Statements
Balance Sheet
Presents, as of a specific time, the amount of resources
that embody economic benefits or services owned or
managed by the SEC (assets); amounts owed by the SEC
(liabilities); and amounts that comprise the difference
(net position).
Statement of Net Cost
Presents the gross cost incurred by the SEC, less exchange
revenue earned from its activities. The SEC presents cost
of operations by program to provide cost information at
the program level, and recognizes collections as exchange
revenue on the Statement of Net Cost, even when the
collections are transferred to other entities.
Statement of Changes in Net Position
Reports the change in net position during the reporting
period, including changes to Cumulative Results of
Operations and Unexpended Appropriations.
Statement of Budgetary Resources1
Provides information about how budgetary resources
were made available, and reports their status at year end.
Statement of Custodial Activity
Reports the collection of revenue for the U.S. Treasury
General Fund. The SEC accounts for sources and
disposition of the collections as custodial activities on this
statement. Custodial collections of non-exchange revenue,
such as amounts collected from violators of securities laws
as a result of enforcement proceedings, are reported only
on the Statement of Custodial Activity.
Accompanying Notes to the Financial Statements
Provides a description of significant accounting policies
and detailed information on select statement line items.
Required Supplementary Information (Unaudited)2
Reports the Combining Statements of Budgetary
Resources by fund account.
IPF Financial Statements
IPF Financial Statements
Provides stand-alone, comparative financial statements
(Balance Sheet, Statement of Net Cost, Statement of
Changes in Net Position, and Statement of Budgetary
Resources), as required by the Dodd-Frank Act.
Accompanying Notes to the IPF Financial Statements
Provides a description of significant accounting policies
and detailed information on select statement line items,
as required by the Dodd-Frank Act.
1
Budgetary information aggregated for purposes of the Statement of Budgetary Resources is disaggregated for each of the SEC’s major budget accounts
and is presented as Required Supplementary Information.
2 The SEC does not have stewardship over resources or responsibilities for which supplementary stewardship reporting would be required.
FINANCIAL SECTION | 33
REPORT OF INDEPENDENT AUDITORS
441 G St. N.W.
Washington, DC 20548
Independent Auditor’s Report
To the Chairman of the United States Securities and Exchange Commission
In our audits of the fiscal year 2025 financial statements of the United States Securities and
Exchange Commission (SEC)1 and its Investor Protection Fund (IPF),2 we found
•
the SEC and IPF financial statements as of and for the fiscal year ended September 30,
2025, are presented fairly, in all material respects, in accordance with U.S. generally
accepted accounting principles;
•
SEC maintained, in all material respects, effective internal control over financial reporting for
SEC and for IPF as of September 30, 2025; and
•
no reportable noncompliance for fiscal year 2025 with provisions of applicable laws,
regulations, contracts, and grant agreements we tested.
The following sections discuss in more detail (1) our report on SEC and IPF’s financial
statements and on internal control over financial reporting, a section on required supplementary
information (RSI),3 and a section on other information included with the financial statements;4 (2)
our report on compliance with laws, regulations, contracts, and grant agreements; and (3)
agency comments.
1Section 963 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), requires that (1)
SEC annually submit a report to Congress describing management’s responsibility for, and assessing the
effectiveness of, internal control over financial reporting during the fiscal year; (2) the SEC Chair and Chief Financial
Officer attest to SEC’s report; and (3) GAO assess the effectiveness of SEC’s internal control over financial reporting
and evaluate, attest to, and report on SEC’s assessment. Pub. L. No. 111-203, § 963(a), (b), 124 Stat. 1376, 1910,
(classified at 15 U.S.C. § 78d-8(a), (b)). SEC evaluated its internal control over financial reporting in accordance with
the Office of Management and Budget’s Circular A-123, Management’s Responsibility for Enterprise Risk
Management and Internal Control, based on criteria established under 31 U.S.C. § 3512(c), (d), commonly known as
the Federal Managers’ Financial Integrity Act of 1982.
2IPF was established by section 922 of the Dodd-Frank Act. It funds the activities of SEC’s whistleblower award
program under that section and the SEC Office of Inspector General Employee Suggestion Program established
under section 966 of the same law. Pub. L. No. 111-203, §§ 922(a), 966, 124 Stat. 1376, 1844, 1912-13 (classified as
amended at 15 U.S.C. §§ 78d-4(e), 78u-6(b), (g)). IPF is a separate SEC fund, and its financial statements present
SEC’s financial activity associated with these programs. Accordingly, IPF’s financial transactions are also included in
SEC’s overall financial statements.
3The RSI consists of the Management’s Discussion and Analysis and the Combined Statement of Budgetary
Resources, by Fund, which are included with the financial statements.
4Other information consists of information included with the financial statements, other than the RSI and the auditor’s
report.
34 | 2025 SEC AGENCY FINANCIAL REPORT
Report on the Financial Statements and on Internal Control over Financial Reporting
Opinion on the Financial Statements
SEC is required by law to annually prepare and submit audited financial statements covering all
of its accounts and associated activities to Congress and the Office of Management and
Budget.5 Further, the Securities Exchange Act of 1934, as amended in 2010 by section 922 of
the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), requires
SEC to annually submit a complete set of audited financial statements for IPF to Congress.6
IPF’s financial transactions are also included in SEC’s overall financial statements. In
accordance with our authority to audit statements and schedules prepared by executive
agencies and their components,7 we have audited the SEC and IPF financial statements.
SEC’s financial statements comprise the balance sheet as of September 30, 2025; the related
statements of net cost, changes in net position, budgetary resources, and custodial activity for
the fiscal year then ended; and the related notes to the financial statements. IPF’s financial
statements comprise the balance sheet as of September 30, 2025; the related statements of net
cost, changes in net position, and budgetary resources for the fiscal year then ended; and the
related notes to the financial statements.
In our opinion, SEC’s financial statements present fairly, in all material respects, SEC’s financial
position as of September 30, 2025, and its net cost of operations, changes in net position,
budgetary resources, and custodial activity for the fiscal year then ended in accordance with
U.S. generally accepted accounting principles. In our opinion, IPF’s financial statements present
fairly, in all material respects, IPF’s financial position as of September 30, 2025, and its net cost
of operations, changes in net position, and budgetary resources for the fiscal year then ended in
accordance with U.S. generally accepted accounting principles.
Opinion on Internal Control over Financial Reporting
In accordance with the Dodd-Frank Act, we have assessed the effectiveness of SEC’s internal
control over financial reporting, evaluated SEC’s assessment of such effectiveness, and are
attesting to and reporting on SEC’s assessment of its internal control over financial reporting.
We also have audited SEC’s internal control over financial reporting as of September 30, 2025,
based on criteria established under 31 U.S.C. § 3512(c), (d), commonly known as the Federal
Managers’ Financial Integrity Act of 1982 (FMFIA). In our opinion, SEC maintained, in all
material respects, effective internal control over financial reporting as of September 30, 2025,
for SEC and for IPF, based on criteria established under FMFIA.
Basis for Opinions
We conducted our audits in accordance with U.S. generally accepted government auditing
standards. Our responsibilities under those standards are further described in the Auditor’s
Responsibilities for the Audits of the Financial Statements and Internal Control over Financial
531 U.S.C. § 3515.
6Dodd-Frank Act, § 922(a), 124 Stat. 1844, adding § 21F(g)(5) of the Securities Exchange Act of 1934 (classified at
15 U.S.C. § 78u-6(g)(5)).
731 U.S.C. § 3521(g), (i).
Page 2
FINANCIAL SECTION | 35
Reporting section of our report. We are required to be independent of the SEC and to meet our
other ethical responsibilities, in accordance with the relevant ethical requirements relating to our
audits. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinions.
Responsibilities of Management for the Financial Statements and Internal Control over Financial
Reporting
Management is responsible for
•
the preparation and fair presentation of SEC’s and IPF’s financial statements in accordance
with U.S. generally accepted accounting principles;
•
preparing, measuring, and presenting the RSI in accordance with U.S. generally accepted
accounting principles;
•
preparing and presenting other information included in SEC’s agency financial report, and
ensuring the consistency of that information with the audited financial statements and the
RSI;
•
designing, implementing, and maintaining effective internal control over financial reporting
relevant to the preparation and fair presentation of financial statements that are free from
material misstatement, whether due to fraud or error;
•
assessing the effectiveness of internal control over financial reporting based on the criteria
established under FMFIA; and
•
its assessment about the effectiveness of internal control over financial reporting as of
September 30, 2025, included in the accompanying Management’s Report on Internal
Control over Financial Reporting.
Auditor’s Responsibilities for the Audit of the Financial Statements and Internal Control over
Financial Reporting
Our objectives are to (1) obtain reasonable assurance about whether the financial statements
as a whole are free from material misstatement, whether due to fraud or error, and whether
effective internal control over financial reporting was maintained in all material respects and (2)
issue an auditor’s report that includes our opinions.
Reasonable assurance is a high level of assurance but is not absolute assurance and therefore
is not a guarantee that an audit of the financial statements or an audit of internal control over
financial reporting conducted in accordance with U.S. generally accepted government auditing
standards will always detect a material misstatement or a material weakness when it exists.8
The risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions,
8A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such
that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be
prevented, or detected and corrected, on a timely basis. A deficiency in internal control exists when the design or
operation of a control does not allow management or employees, in the normal course of performing their assigned
functions, to prevent, or detect and correct, misstatements on a timely basis.
Page 3
36 | 2025 SEC AGENCY FINANCIAL REPORT
misrepresentations, or the override of internal control. Misstatements, including omissions, are
considered to be material if there is a substantial likelihood that, individually or in the aggregate,
they would influence the judgment made by a reasonable user based on the financial
statements.
In performing an audit of financial statements and an audit of internal control over financial
reporting in accordance with U.S. generally accepted government auditing standards, we:
•
Exercise professional judgment and maintain professional skepticism throughout the audits.
•
Identify and assess the risks of material misstatement of the financial statements, whether
due to fraud or error, and design and perform audit procedures responsive to those risks.
Such procedures include examining, on a test basis, evidence regarding the amounts and
disclosures in the financial statements.
•
Obtain an understanding of internal control relevant to our audit of the financial statements in
order to design audit procedures that are appropriate in the circumstances.
•
Obtain an understanding of internal control relevant to our audit of internal control over
financial reporting, assess the risks that a material weakness exists, and test and evaluate
the design and operating effectiveness of internal control over financial reporting based on
the assessed risk. Our audit of internal control also considered SEC’s process for evaluating
and reporting on internal control over financial reporting based on criteria established under
FMFIA. We did not evaluate all internal controls relevant to operating objectives as broadly
established under FMFIA, such as those controls relevant to preparing performance
information and ensuring efficient operations. We limited our internal control testing to
testing controls over financial reporting. Our internal control testing was for the purpose of
expressing an opinion on whether effective internal control over financial reporting was
maintained, in all material respects. Consequently, our audit may not identify all deficiencies
in internal control over financial reporting that are less severe than a material weakness.
•
Evaluate the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluate the overall
presentation of the financial statements.
•
Perform other procedures we consider necessary in the circumstances.
We are required to communicate with those charged with governance regarding, among other
matters, the planned scope and timing of the audit, significant audit findings, and certain internal
control-related matters that we identified during the financial statement audit.
Definition and Inherent Limitations of Internal Control over Financial Reporting
An entity’s internal control over financial reporting is a process effected by those charged with
governance, management, and other personnel. The objectives of internal control over financial
reporting are to provide reasonable assurance that
•
transactions are properly recorded, processed, and summarized to permit the preparation of
financial statements in accordance with U.S. generally accepted accounting principles, and
assets are safeguarded against loss from unauthorized acquisition, use, or disposition, and
Page 4
FINANCIAL SECTION | 37
•
transactions are executed in accordance with provisions of applicable laws, including those
governing the use of budget authority, regulations, contracts, and grant agreements,
noncompliance with which could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent, or
detect and correct, misstatements due to fraud or error. We also caution that projecting any
evaluation of effectiveness to future periods is subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies
or procedures may deteriorate.
Required Supplementary Information
U.S. generally accepted accounting principles issued by the Federal Accounting Standards
Advisory Board (FASAB) require that the RSI be presented to supplement the financial
statements. Such information is the responsibility of management and, although not a part of the
financial statements, is required under standards issued by FASAB, which considers it to be an
essential part of financial reporting for placing the financial statements in appropriate
operational, economic, or historical context.
We have applied certain limited procedures to the RSI in accordance with U.S. generally
accepted government auditing standards. These procedures consisted of (1) inquiring of
management about the methods used to prepare the RSI and (2) comparing the RSI for
consistency with management’s responses to our inquiries, the financial statements, and other
knowledge we obtained during the audit of the financial statements, in order to report omissions
or material departures from FASAB guidelines, if any, identified by these limited procedures. We
did not audit and we do not express an opinion or provide any assurance on the RSI because
the limited procedures we applied do not provide sufficient evidence to express an opinion or
provide any assurance.
Other Information
SEC’s other information contains a wide range of information, some of which is not directly
related to the financial statements. This information is presented for purposes of additional
analysis and is not a required part of the financial statements or the RSI. Management is
responsible for the other information included in SEC’s agency financial report. The other
information comprises the following sections: Inspector General’s Statement on Management
and Performance Challenges, Summary of Financial Statement and Audit and Management
Assurances, Payment Integrity Reporting Details, and Civil Monetary Penalty Adjustment for
Inflation. Other information does not include the financial statements and our auditor’s report
thereon. Our opinion on the financial statements does not cover the other information, and we
do not express an opinion or any form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other
information and consider whether a material inconsistency exists between the other information
and the financial statements, or the other information otherwise appears to be materially
misstated. If, based on the work performed, we conclude that an uncorrected material
misstatement of the other information exists, we are required to describe it in our report.
Report on Compliance with Laws, Regulations, Contracts, and Grant Agreements
In connection with our audits of SEC’s and IPF’s financial statements, we tested compliance
with selected provisions of applicable laws, regulations, contracts, and grant agreements
Page 5
38 | 2025 SEC AGENCY FINANCIAL REPORT
consistent with our auditor’s responsibilities discussed below.
Results of Our Tests for Compliance with Laws, Regulations, Contracts, and Grant Agreements
Our tests for compliance with selected provisions of applicable laws, regulations, contracts, and
grant agreements disclosed no instances of noncompliance for fiscal year 2025 that would be
reportable under U.S. generally accepted government auditing standards. However, the
objective of our tests was not to provide an opinion on compliance with laws, regulations,
contracts, and grant agreements applicable to SEC and IPF. Accordingly, we do not express
such an opinion.
Basis for Results of Our Tests for Compliance with Laws, Regulations, Contracts, and Grant
Agreements
We performed our tests of compliance in accordance with U.S. generally accepted government
auditing standards.
Responsibilities of Management for Compliance with Laws, Regulations, Contracts, and Grant
Agreements
SEC management is responsible for complying with laws, regulations, contracts, and grant
agreements applicable to SEC and IPF.
Auditor’s Responsibilities for Tests of Compliance with Laws, Regulations, Contracts, and Grant
Agreements
Our responsibility is to test compliance with selected provisions of laws, regulations, contracts,
and grant agreements applicable to SEC and IPF that have a direct effect on the determination
of material amounts and disclosures in SEC’s and IPF’s financial statements and perform
certain other limited procedures. Accordingly, we did not test compliance with all provisions of
laws, regulations, contracts, and grant agreements applicable to SEC and IPF. We caution that
noncompliance may occur and not be detected by these tests.
Intended Purpose of Report on Compliance with Laws, Regulations, Contracts, and Grant
Agreements
The purpose of this report is solely to describe the scope of our testing of compliance with
selected provisions of applicable laws, regulations, contracts, and grant agreements, and the
results of that testing, and not to provide an opinion on compliance. This report is an integral
part of an audit performed in accordance with U.S. generally accepted government auditing
standards in considering compliance. Accordingly, this report on compliance with laws,
regulations, contracts, and grant agreements is not suitable for any other purpose.
Agency Comments
In commenting on a draft of this report, SEC stated that it is pleased that GAO found that its
financial statements and notes were presented fairly, in all material respects, in conformity with
U.S. generally accepted accounting principles. The complete text of SEC’s response is reprinted
in enclosure I.
Page 6
FINANCIAL SECTION | 39
M. Hannah Padilla
Director
Financial Management and Assurance
January 12, 2026
Page 7
40 | 2025 SEC AGENCY FINANCIAL REPORT
ENCLOSURE I: MANAGEMENT’S RESPONSE
TO AUDIT OPINION
PAULS.
ATKINS
CHAIRMAN
UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
100 F STREET, NE,
10700
20549
+ 1-202-551-2107
WASHINGTON,
SUITE
DC
January 9, 2026
Ms. M. Hannah Padilla
Director
Financial Management and Assurance
United States Government Accountability Office
441 G Street, N.W.
Washington, DC 20548
Dear Ms. Padilla:
Thank you for the opportunity to review and comment on the draft audit report of the
Government Accountability Office (GAO). I am pleased that the GAO's FY 2025 audit found
that the Securities and Exchange Commission's (SEC) financial statements and notes were
presented fairly, in all material respects, and in conformity with U.S. generally accepted
accounting principles. GAO also reported that the SEC had effective internal controls over
financial reporting, and that there was no reportable noncompliance with applicable laws and
regulations.
I want to thank the GAO staff for their professionalism and dedication during the audit. If
you have any questions or concerns, please do not hesitate to contact me.
Sincerely,
.~
Paul S. Atkins
Chairman
FINANCIAL SECTION | 41
SEC FINANCIAL STATEMENTS
U.S. SECURITIES AND EXCHANGE COMMISSION
Balance Sheet
As of September 30, 2025
2025
(DOLLARS IN THOUSANDS)
ASSETS (NOTE 2):
Intragovernmental:
Fund Balance with Treasury (Note 3)
$
10,256,197
4,753,080
Investments, Net (Note 5)
19,370
Advances and Prepayments
15,028,647
Total Intragovernmental
With the Public:
5
Cash and Other Monetary Assets (Note 4)
Accounts Receivable, Net (Note 6)
210,816
Property and Equipment, Net (Note 7)
290,748
501,569
Total With the Public
Total Assets
$
15,530,216
$
2,888
LIABILITIES (NOTE 8):
Intragovernmental:
Accounts Payable
Other Liabilities
Payroll Taxes Payable
1,197
Custodial Liability
18,612
739
Liability for Non-Entity Assets
7,565
Benefit Program Contributions Payable
31,001
Total Intragovernmental
With the Public:
Accounts Payable
68,693
Federal Employee Salary, Leave, and Benefits Payable
173,376
Post-Employment Benefits Payable
4,840
Registrant Deposits
69,078
Other Liabilities
173,583
Lease Liability (Note 9)
5,123,659
Liability for Disgorgement and Penalties (Note 16)
498,096
Contingent Liabilities (Note 10)
82
Other Accrued Liabilities (Note 8)
6,111,407
Total With the Public
6,142,408
Total Liabilities
Commitments and Contingencies (Note 10)
NET POSITION:
252,795
Unexpended Appropriations – Funds from Dedicated Collections (Note 11)
9,135,013
Cumulative Results of Operations – Funds from Dedicated Collections (Note 11)
Total Net Position
Total Liabilities and Net Position
The accompanying notes are an integral part of these financial statements.
42 | 2025 SEC AGENCY FINANCIAL REPORT
$
9,387,808
$
15,530,216
U.S. SECURITIES AND EXCHANGE COMMISSION
Statement of Net Cost
For the year ended September 30, 2025
2025
(DOLLARS IN THOUSANDS)
PROGRAM COSTS:
Enforcement
$
731,850
Examinations
524,157
Corporation Finance
194,202
Trading and Markets
126,359
Investment Management
97,800
Economic and Risk Analysis
94,105
General Counsel
71,273
Other Program Offices
113,672
Agency Direction and Administrative Support
326,146
Inspector General
25,306
Total Program Costs
2,304,870
Cost Not Assigned to Programs
60,995
Total Costs
2,365,865
Less: Earned Revenue Not Attributed to Programs
4,354,710
Net (Income)/Cost of Operations (Note 15)
$ (1,988,845)
The accompanying notes are an integral part of these financial statements.
FINANCIAL SECTION | 43
U.S. SECURITIES AND EXCHANGE COMMISSION
Statement of Changes in Net Position
For the year ended September 30, 2025
2025
(DOLLARS IN THOUSANDS)
Funds from
Dedicated Collections
All Other Funds
Consolidated Total
$
$
UNEXPENDED APPROPRIATIONS:
Beginning Balances
$
252,813
—
252,813
Appropriations Used
(18)
—
(18)
Net Change in Unexpended Appropriations
(18)
—
(18)
Total Unexpended Appropriations: Ending
252,795
—
252,795
7,984,820
—
7,984,820
18
—
18
Non-Exchange Revenue (Note 12)
15,446
—
15,446
Imputed Financing
122,944
—
122,944
—
(977,060)
(977,060)
Net (Income)/Cost of Operations
(1,011,785)
(977,060)
(1,988,845)
Net Change in Cumulative Results of Operations
1,150,193
—
1,150,193
Cumulative Results of Operations: Ending (Note 11)
9,135,013
—
9,135,013
—
$ 9,387,808
CUMULATIVE RESULTS OF OPERATIONS:
Beginning Balances
Appropriations Used
Other (Note 12)
Net Position
The accompanying notes are an integral part of these financial statements.
44 | 2025 SEC AGENCY FINANCIAL REPORT
$
9,387,808
$
U.S. SECURITIES AND EXCHANGE COMMISSION
Statement of Budgetary Resources
For the year ended September 30, 2025
2025
(DOLLARS IN THOUSANDS)
BUDGETARY RESOURCES:
Unobligated Balance from Prior Year Budget Authority, Net (Discretionary and Mandatory) (Note 14)
$
Appropriations (Discretionary and Mandatory)
825,574
72,039
Spending Authority from Offsetting Collections (Discretionary and Mandatory)
2,189,056
Total Budgetary Resources
$
3,086,669
STATUS OF BUDGETARY RESOURCES:
New Obligations and Upward Adjustments (Total)
$
2,279,687
Unobligated Balance, End of Year:
Apportioned, Unexpired Accounts
756,940
Exempt from Apportionment, Unexpired Accounts
43,836
Unapportioned, Unexpired Accounts
6,206
Unobligated Balance, End of Year (Total)
806,982
Total Budgetary Resources
$
3,086,669
OUTLAYS, NET:
Outlays, Net (Total) (Discretionary and Mandatory)
$
(1,302,409)
$
(1,318,602)
Distributed Offsetting Receipts
Agency Outlays, Net (Discretionary and Mandatory) (Note 15)
(16,193)
The accompanying notes are an integral part of these financial statements.
FINANCIAL SECTION | 45
U.S. SECURITIES AND EXCHANGE COMMISSION
Statement of Custodial Activity
For the year ended September 30, 2025
2025
(DOLLARS IN THOUSANDS)
REVENUE ACTIVITY:
Sources of Cash Collections:
Disgorgement and Penalties
$
Other
911,843
13,023
Total Cash Collections
924,866
Accrual Adjustments (Note 13)
(79,776)
845,090
Total Custodial Revenue
DISPOSITION OF COLLECTIONS:
Amounts Transferred to:
Department of the Treasury
924,866
Change in Amounts Yet to be Transferred
(79,776)
845,090
Total Disposition of Collections
NET CUSTODIAL ACTIVITY
The accompanying notes are an integral part of these financial statements.
46 | 2025 SEC AGENCY FINANCIAL REPORT
$
—
NOTES TO THE FINANCIAL STATEMENTS
As of September 30, 2025
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity
The U.S. Securities and Exchange Commission (SEC)
is an independent agency of the U.S. Government
established pursuant to the Securities Exchange Act
of 1934 (Exchange Act), charged with regulating
this country’s capital markets. The SEC’s mission
is to protect investors; maintain fair, orderly, and
efficient markets; and facilitate capital formation.
The SEC works with Congress, other executive branch
agencies, self-regulatory organizations (SROs) (e.g.,
stock exchanges and the Financial Industry Regulatory
Authority), accounting and auditing standards setters,
state securities regulators, law enforcement officials,
and many other organizations in support of the
agency’s mission.
The SEC consists of five presidentially appointed
Commissioners with staggered five-year terms. The
SEC is organized into six divisions and multiple offices.
The six divisions are the Division of Enforcement, the
Division of Examinations, the Division of Corporation
Finance, the Division of Trading and Markets, the
Division of Investment Management, and the Division
of Economic and Risk Analysis. The offices include
the Office of the General Counsel, the Office of
Administrative Law Judges, the Office of the Advocate
for Small Business Capital Formation, the Office of
the Chief Accountant, the Office of Credit Ratings,
the Office of International Affairs, the Office of the
Investor Advocate, the Office of Investor Education and
Advocacy,1 the Office of Municipal Securities, the Office
of Inspector General, 10 regional offices, and various
supporting services.
1
The reporting entity is a component of the U.S.
Government. For this reason, some of the assets and
liabilities reported by the entity are eliminated for
government-wide reporting because they are offset by
assets and liabilities of another U.S. Government entity.
These financial statements should be read with the
realization that they are for a component of the U.S.
Government, a sovereign entity.
The SEC reporting entity includes the Investor Protection Fund. In addition to being included in the SEC’s
financial statements, the Investor Protection Fund’s
financial activities and balances are also presented
separately as stand-alone financial statements, as
required by Exchange Act Section 21F(g)5.
As discussed in Note 1.R, Disgorgement and Penalties,
disgorgement funds collected and held by the SEC on
behalf of harmed investors are part of the SEC reporting
entity. However, disgorgement funds held by the U.S.
Courts and by non-federal receivers on behalf of harmed
investors are not part of the SEC reporting entity.
As discussed in Note 10.A, Commitments: Securities
Investor Protection Act, the SEC reporting entity
does not include the Securities Investor Protection
Corporation.
The SEC reporting entity also does not include the
Public Company Accounting Oversight Board (PCAOB),
a private-sector, nonprofit corporation created to oversee
the audits of public companies, brokers, and dealers
In FY 2026, the SEC’s Office of Investor Education and Advocacy was renamed the Office of Investor Education and Assistance.
FINANCIAL SECTION | 47
registered with the SEC. When the Sarbanes-Oxley
Act of 2002 created the PCAOB, it gave the SEC the
authority to oversee the PCAOB's operations, to appoint
or remove Board members, to approve the PCAOB's
budget and rules, and to entertain appeals of PCAOB
inspection reports and disciplinary actions.
The PCAOB is not part of the federal government.
It is funded by an accounting support fee collected
from public companies, brokers, and dealers. The
primary duties of the PCAOB include registering
public accounting firms that prepare audit reports for
public companies, brokers, and dealers; establishing
or adopting auditing and related attestation, quality
control, ethics, and independence standards; and
inspecting and disciplining registered accounting firms
and their associated persons.
The SEC’s financial statements also do not include
the Financial Accounting Standards Board (FASB)
or its parent organization, the Financial Accounting
Foundation (FAF). The FAF is a Delaware nonprofit
non-stock corporation, incorporated in 1972,
which was created for the purpose of providing a
corporate structure for the FASB, the body whose
financial accounting and reporting standards for
non-governmental entities have been recognized as
authoritative by the American Institute of CPAs and the
SEC. The structure of the FAF and the FASB reflects the
view that a standard-setter should be independent from
preparers of financial statements and from accounting
and auditing firms. This independence is necessary
to assure that the interests of the users of financial
statements remain paramount, and has been critical
to the integrity of our financial and capital markets.
Although pursuant to Section 109 of the SarbanesOxley Act of 2002, the SEC is required to determine
annually that the FASB accounting support fee is within
the parameters prescribed by Congress, the SEC does
not have authority, and is not required, to approve the
FASB budget.
48 | 2025 SEC AGENCY FINANCIAL REPORT
B. Basis of Presentation and Accounting
These notes are an integral part of the SEC’s financial
statements, which present the financial position, net
cost of operations, changes in net position, budgetary
resources, and custodial activities of the SEC as required
by the Accountability of Tax Dollars Act of 2002.
The statements may differ from other financial reports
submitted pursuant to Office of Management and
Budget (OMB) directives for the purpose of monitoring
and controlling the use of the SEC’s budgetary resources,
due to differences in accounting and reporting principles
discussed in the following paragraphs. The SEC’s books
and records serve as the source of the information
presented in the accompanying financial statements.
The agency classifies assets and liabilities in these
financial statements according to the type of entity
associated with the transactions. Intragovernmental
assets and liabilities are those due from or to other
federal entities.
The SEC’s financial statements are prepared in
conformity with generally accepted accounting
principles (GAAP) for federal reporting entities and
presented in conformity with OMB Circular A-136,
Financial Reporting Requirements. In accordance with
OMB Circular A-136, the Statement of Budgetary
Resources is presented on a combined basis, and the
Balance Sheet, Statement of Net Cost, Statement of
Changes in Net Position, and Statement of Custodial
Activity are presented on a consolidated basis.
The Balance Sheet, Statement of Net Cost, and
Statement of Changes in Net Position are prepared using
the accrual basis of accounting. Accordingly, revenues
are recognized when services are provided, and expenses
are recognized when incurred without regard to the
receipt or payment of cash. These principles differ from
budgetary accounting and reporting principles on which
the Statement of Budgetary Resources is prepared.
The differences relate primarily to the capitalization
and depreciation of property and equipment, as well
as the recognition of other assets and liabilities. See
Note 15, Reconciliation of Net Cost of Operations to
Net Outlays, for more information. The Statement of
Custodial Activity is presented on the modified cash
basis of accounting. See Note 13, Custodial Activity.
The SEC presents cost of operations by program.
The presentation by program is consistent with the
presentation used by the agency in submitting its
budget requests.
Accounting standards require all reporting entities
to disclose that accounting standards allow certain
presentations and disclosures to be modified, if needed,
to prevent the disclosure of classified information.
C. Use of Estimates
The preparation of financial statements in conformity
with GAAP requires management to make estimates
and assumptions that affect the reported amounts of
assets, liabilities, revenues, and costs. These estimates
are based on management’s best knowledge of current
events, historical experience, actions that the SEC may
undertake in the future, and various other assumptions
believed to be reasonable under the circumstances. The
estimates include, but are not limited to, the allowance
for uncollectible accounts and the allocation of costs
to the SEC programs presented in the Statement of Net
Cost. Estimates also include (a) the recognition and
disclosure of any contingent liabilities and the disclosure
of other potential future payments as of the date of
the financial statements, and (b) the reported amounts
of revenue and expenses during the reporting period.
Actual results may differ from these estimates.
D. Intra- and Inter-Agency Relationships
The SEC is a single federal agency composed of various
Treasury Appropriation Fund Symbols (Funds),
and it has only limited intra-entity transactions. The
Investor Protection Fund finances the operations of
the Office of Inspector General Employee Suggestion
Program on a reimbursable basis. This has given rise
to a small amount of intra-entity eliminations of the
related revenue and expense transactions between the
Investor Protection Fund and the SEC’s general Salaries
and Expenses Fund. See Note 1.E, Fund Accounting
Structure, for more information about the SEC’s Funds.
E. Fund Accounting Structure
The SEC, in common with other federal agencies,
utilizes various Funds to recognize and track appropriation authority provided by Congress, collections from
the public, and other financial activity. These Funds are
described below:
1. Funds from Dedicated Collections: Statement
of Federal Financial Accounting Standards 27,
Identifying and Reporting Funds from Dedicated
Collections, as amended, states that, “funds from
dedicated collections are financed by specifically
identified revenues, provided to the government
by non-federal sources, often supplemented by
other financing sources, which remain available
over time. These specifically identified revenues
and other financing sources are required by statute
to be used for designated activities, benefits, or
purposes, and must be accounted for separately
from the government’s general revenues.” The SEC’s
funds from dedicated collections are deposited into
Fund X0100, Salaries and Expenses; Fund X5567,
Investor Protection Fund; and Fund X5566,
Reserve Fund.
FINANCIAL SECTION | 49
• Salaries and Expenses: Earned revenues from
securities transaction fees from SROs are deposited
into Fund X0100, Salaries and Expenses, Securities
and Exchange Commission. These collections are
used to offset the SEC’s annual appropriation and
are remitted to the U.S. Treasury General Fund
at the end of the year. The Salaries and Expenses
Fund is dedicated to carrying out the SEC’s
mission, functions, and day-to-day operations.
Collections in excess of congressional spending
limits are unavailable by law and reported as
Non-Budgetary Fund Balance with Treasury.
• Investor Protection Fund: The Investor Protection Fund provides funding for the payment
of whistleblower awards as required by the
Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010 (Dodd-Frank Act). The
Investor Protection Fund is financed by a portion of
monetary sanctions collected by the SEC in judicial
or administrative actions brought by the SEC.
Persons may receive award payments from the
Investor Protection Fund if they voluntarily provide
original information to the SEC that results in a
successful enforcement action and other conditions
are met. In addition, the Investor Protection Fund
is used to finance the operations of the Office of
Inspector General Employee Suggestion Program
for the receipt of suggestions for improvements in
work efficiency and effectiveness, and allegations
of misconduct or mismanagement within the
SEC. This activity is recognized in Fund X5567,
Monetary Sanctions and Interest, Investor Protection Fund, Securities and Exchange Commission
(Investor Protection Fund).
50 | 2025 SEC AGENCY FINANCIAL REPORT
• Reserve Fund: A portion of SEC registration fee
collections up to $50 million in any one fiscal
year may be deposited in the Reserve Fund, the
balance of which cannot exceed $100 million. The
Reserve Fund may be used by the SEC to obligate
up to $100 million in one fiscal year as the SEC
determines necessary to carry out its functions.
Although amounts deposited in the Reserve
Fund are not subject to apportionment, the SEC
must notify Congress when funds are obligated.
Resources available in the Reserve Fund may be
rescinded or sequestered through congressional
action. During FY 2025, Public Law 119-21
was enacted which closes the SEC’s reserve fund
effective October 1, 2025. Additional information
is provided in Note 14.B, Other Budgetary
Disclosures. This activity is recognized in Fund
X5566, Securities and Exchange Commission
Reserve Fund.
2. Miscellaneous Receipt and Other Accounts:
Miscellaneous Receipt Accounts hold non-entity
receipts and accounts receivable from custodial
activities that the SEC cannot deposit into funds
under its control. These accounts include registration
fee collections in excess of amounts deposited into
the Reserve Fund, receipts pursuant to certain SEC
enforcement actions, and other small collections that
will be sent to the U.S. Treasury General Fund upon
collection. These activities are recognized in Fund
0850.150, Registration, Filing, and Transaction Fees,
Securities and Exchange Commission; Fund 1060,
Forfeitures of Unclaimed Money and Property; Fund
1091, Post Judgement Interest; Fund 1099, Fines,
Penalties, and Forfeitures, Not Otherwise Classified;
Fund 1435, General Fund Proprietary Interest, Not
Otherwise Classified; and Fund 3220, General Fund
Proprietary Receipts, Not Otherwise Classified.
Miscellaneous Receipt Accounts are reported as
“All Other Funds” on the Statement of Changes in
Net Position. The SEC has custodial responsibilities,
as disclosed in Note 1.L, Liabilities. Fund X3875,
Budget Clearing Account, is a suspense account that
temporarily holds immaterial cash balances.
3. Deposit Funds: Deposit Funds hold disgorgement,
penalties, and interest collected and held on behalf of
harmed investors, registrant monies held temporarily
until earned by the SEC, and collections awaiting
disposition or reclassification. These activities
are recognized in Fund X6561, Unearned Fees,
Securities and Exchange Commission, and Fund
X6563, Disgorgement and Penalty Amounts Held
for Investors, Securities and Exchange Commission.
Deposit Funds do not impact the SEC’s Net Position
and are not reported on the Statement of Changes in
Net Position.
F. Entity and Non-Entity Assets
Entity assets are assets that the SEC may use in
its operations.
Non-entity assets are assets that the SEC holds on behalf
of another federal agency or a third party and are not
available for the SEC to use in its operations. See Note
2, Entity and Non-Entity Assets.
G. Fund Balance with Treasury
Fund Balance with Treasury reflects amounts the SEC
holds in the U.S. Treasury that have not been invested
in federal securities. Additional information regarding
the SEC’s Fund Balance with Treasury is provided in
Note 3, Fund Balance with Treasury.
The SEC conducts all of its banking activity in
accordance with directives issued by the U.S.
Department of the Treasury’s Bureau of the
Fiscal Service.
H. Investments
The SEC has the authority to invest disgorgement funds
in Treasury securities, including civil penalties collected
under the “Fair Fund” provision of the Sarbanes-Oxley
Act of 2002. As the funds are collected, the SEC holds
them in a deposit fund account and may invest them
in overnight and short-term market-based Treasury
securities through the U.S. Department of the Treasury’s
Bureau of the Fiscal Service.
The SEC also has authority to invest amounts in the
Investor Protection Fund in overnight and short-term
market-based Treasury securities through the U.S.
Department of the Treasury’s Bureau of the Fiscal
Service. The interest earned on the investments is a
component of the balance of the Fund and available to
be used for expenses of the Investor Protection Fund.
Additional information regarding the SEC’s investments
is provided in Note 5, Investments.
I. Accounts Receivable and Allowance for
Uncollectible Accounts
The SEC’s entity and non-entity accounts receivable
consist primarily of amounts due from the public.
Entity accounts receivable are amounts that the SEC
may retain upon collection. Non-entity accounts
receivable are amounts that the SEC will forward to
another federal agency or to the public after the funds
are collected.
ENTITY ACCOUNTS RECEIVABLE
The bulk of the SEC’s entity accounts receivable arise
from securities transaction fees. Securities transaction
fees are payable to the SEC twice a year: in March
for the period September through December, and in
September for the period January through August.
Accordingly, the year-end accounts receivable accrual
generally represents fees payable to the SEC for one
month of securities transaction fee activity (September).
FINANCIAL SECTION | 51
In addition, the SEC has small amounts of activity
arising from the sale of services provided by the SEC
to other federal agencies and employee-related debt.
NON-ENTITY ACCOUNTS RECEIVABLE
Non-entity accounts receivable arise mainly from
amounts assessed against violators of securities laws,
including disgorgement of illegal gains, civil penalties,
and related assessed interest. The SEC is responsible for
collection, and recognizes a receivable, when an order
of the Commission or a federal court directs payment to
the SEC or the U.S. Treasury General Fund.
Interest recognized by the SEC on non-entity accounts
receivable includes prejudgment interest specified by the
court or administrative order as well as post-judgment
interest on collectible accounts. The SEC does not
recognize interest revenue on accounts considered to
be uncollectible.
The SEC’s enforcement investigation and litigation
activities often result in court orders directing violators
of federal securities laws to pay amounts assessed
to a federal court or to a non-federal receiver acting
on behalf of harmed investors. These orders are not
recognized as accounts receivable by the SEC because
the debts are payable to, and collected by, another party.
Securities registration, tender offer, merger, and other
fees from registrants (filing fee) collections in excess of
those deposited into the SEC’s Reserve Fund are not
available for the SEC’s operations and are transferred
to the U.S. Treasury General Fund. Accounts receivable
amounts arising from filing fees in excess of those
deposited into the Reserve Fund are non-entity and are
held on behalf of the U.S. Treasury General Fund.
ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS
The SEC uses a three-tiered methodology for calculating
the allowance for loss on its disgorgement and penalties
accounts receivable. The first tier involves making an
individual collection assessment of cases that represent
at least 65 percent of the portfolio. The second and
52 | 2025 SEC AGENCY FINANCIAL REPORT
third tiers are composed of the remaining cases that are
equal to or less than 30 days old and over 30 days old,
respectively. For the second and third tiers, the SEC
applies an allowance rate based on historical collection
data analysis.
The SEC calculates the allowance for uncollectible
accounts and the related provision for estimated losses
for filing fees and other accounts receivable using an
analysis of historical collection data. No allowance for
uncollectible accounts or related provision for estimated
losses has been established for securities transaction fees
payable by SROs, as these amounts are fully collectible
based on historical experience.
The SEC writes off receivables that are delinquent for
two or more years by removing the debt amounts from
the gross accounts receivable and any related allowance
for uncollectible accounts.
Additional information about the SEC’s accounts
receivable and allowance for doubtful accounts is
provided in Note 6, Accounts Receivable, Net.
J. Advances and Prepayments
Payments made in advance of the receipt of goods
and services are recorded as advances or prepayments
and recognized as expenses when the related goods
and services are received. Advances and prepayments
are made to other federal agencies such as the U.S.
Department of Defense, the U.S. Government Publishing
Office, and the U.S. Department of Transportation
for expenses that may include investigation services,
accounting processing fees, official publications
in the Federal Register, and the Federal Transit
Benefit Program.
K. Property and Equipment, Net
The SEC’s property and equipment consists of software,
right-to-use lease assets, general-purpose equipment used
by the agency, capital improvements made to buildings
leased by the SEC for office space, and, when applicable,
internal-use software development costs for projects in
development. The SEC reports property and equipment
purchases and additions at historical cost. The agency
expenses property and equipment acquisitions that do
not meet the capitalization criteria as well as normal
repairs and maintenance.
The SEC depreciates property and equipment over the
estimated useful lives using the straight-line method
of depreciation. For right-to-use lease assets, the SEC
amortizes the balance using the straight-line method
over the term of the lease. The agency removes property
and equipment from its asset accounts in the period of
disposal, retirement, or removal from service. The SEC
recognizes the difference between the book value and
any proceeds as a gain or loss in the period that the asset
is removed.
L. Liabilities
The SEC recognizes liabilities for probable future
outflows or other sacrifices of resources as a result
of events that have occurred as of the Balance Sheet
date. The SEC’s liabilities consist of routine operating
accounts payable, accrued payroll and benefits, lease
liabilities, legal liabilities, liabilities to offset non-entity
assets such as registrant monies held temporarily until
earned by the SEC, disgorgement and penalties collected
and receivable, and amounts collected or receivable on
behalf of the U.S. Treasury General Fund. See Note 1.F,
Entity and Non-Entity Assets, and Note 9, Leases, for
additional information.
ENFORCEMENT-RELATED LIABILITIES
A liability for disgorgement and penalties arises when
an order is issued for the SEC to collect disgorgement,
penalties, and interest from securities law violators.
When the Commission or court issues such an order, the
SEC establishes an accounts receivable due to the SEC
and a corresponding a liability. The presentation of this
liability on the Balance Sheet is dependent upon several
factors. If the court or Commission order indicates that
collections are to be retained by the federal government
by transfer to the U.S. Treasury General Fund, the
liabilities are classified as custodial (that is, collected
on behalf of the government) and intragovernmental.
If the order indicates that the funds are eligible for
distribution to harmed investors, the SEC will recognize
a liability (that is, a liability of the SEC to make a
payment to the public). This liability is not presented as
a custodial liability. The SEC does not record liabilities
on its financial statements for disgorgement and penalty
amounts that another government entity, such as a
court, or a non-governmental entity, such as a receiver,
has collected or will collect.
In accordance with the provisions of the Dodd-Frank
Act, collections not distributed to harmed investors
may be transferred to either the Investor Protection
Fund or the U.S. Treasury General Fund. See Note 16,
Disgorgement and Penalties, for additional information.
LIABILITY CLASSIFICATION
The SEC recognizes liabilities that are covered by
budgetary resources, liabilities that are not covered by
budgetary resources, and liabilities that do not require
the use of budgetary resources. See Note 8, Liabilities
Covered and Not Covered by Budgetary Resources, for
more information.
M. Employee Retirement Systems and Benefits
The SEC’s employees may participate in either the
Civil Service Retirement System (CSRS) or the Federal
Employees Retirement System (FERS), depending on
when they started working for the federal government.
FERS and Social Security automatically cover most
employees hired after December 31, 1983.
All employees are eligible to contribute to a Thrift
Savings Plan (TSP). For those employees participating
in FERS, the TSP is automatically established, and the
SEC makes a mandatory one percent contribution to
this plan. In addition, the SEC matches contributions
ranging from one to four percent for FERS-eligible
employees who contribute to their TSP. Employees
FINANCIAL SECTION | 53
participating in CSRS do not receive matching
contributions to their TSP. The SEC also provides a
supplemental retirement contribution program that
matches an employee’s TSP contribution up to an
additional three percent of their salary.
FY 2025 DRP, VERA, and VSIP payments were
reported as costs not assigned to programs on the
SEC’s Statement of Net Cost. Costs not assigned
to programs includes general management and
administrative support costs that cannot be traced,
assigned, or allocated to programs.
The SEC does not report CSRS, FERS, Federal
Employees Health Benefits Program, Federal Employees
Group Life Insurance Program assets, or accumulated
plan benefits payable; the U.S. Office of Personnel
Management (OPM) reports this information. In
accordance with federal accounting standards, the SEC
recognizes costs incurred by the SEC but financed by
OPM on behalf of the SEC as an expense. The funding
for this expense is reflected as imputed financing on the
Statement of Changes in Net Position.
N. Injury and Post-Employment Compensation
The Federal Employees’ Compensation Act (FECA),
administered by the U.S. Department of Labor, provides
income and medical cost protection to covered federal
civilian employees harmed on the job or who have
contracted an occupational disease, and dependents of
employees whose death is attributable to a job-related
injury or occupational disease. See Note 8, Liabilities
Covered and Not Covered by Budgetary Resources.
In FY 2025, to comply with Presidential mandates to
streamline the federal workforce, OPM established
the Deferred Resignation Program (DRP) allowing
employees to voluntarily resign effective no later than
September 30, 2025. Upon acceptance of resignation,
employees were placed on administrative leave,
maintaining their pay and benefits. The SEC had
170 employees participate at a cost of $37.1 million.
O. Annual, Sick, and Other Leave
The SEC accrues annual leave and compensatory time as
earned and reduces the accrual when leave is taken. The
balances in the accrued leave accounts reflect current
leave balances and pay rates. See Note 8, Liabilities
Covered and Not Covered by Budgetary Resources. The
SEC expenses sick leave and other types of non-vested
leave as used.
Following the conclusion of the DRP acceptance
period, the SEC also provided all employees with
a Voluntary Early Retirement Authority (VERA)/
Voluntary Separation Incentive Payment (VSIP)
opportunity. The SEC offered one additional VERA/
VSIP opportunity at fiscal year-end to all managers
within the agency as well as to staff within the Office
of Information Technology who expressed interest by
September 30th. VERA lowers the retirement age or
years of service requirement for eligible employees, while
VSIP offers payment in exchange for separation from
the SEC. As of September 30, 2025, 472 employees
participated at a cost of $23.9 million.
P. Exchange and Non-Exchange Revenue
The SEC’s revenues include exchange revenues, which
are generated from transactions in which both parties
give and receive value, and non-exchange revenues,
which arise from the federal government’s ability to
demand payment.
54 | 2025 SEC AGENCY FINANCIAL REPORT
The SEC does not recognize amounts collected and held
by another government entity, such as a court registry,
or a non-government entity, such as a receiver.
The following table summarizes the SEC’s sources of exchange and non-exchange revenues.
The SEC’s Revenues
and Financing Sources
Exchange and NonExchange Revenue
Revenue Availability
Financial Statement Presentation
Securities transaction
fees1
Exchange
Revenue
Collection of securities transaction fees are used
to offset the SEC’s annual appropriation, up to
the annual limit set by legislation. Collections of
transaction fees beyond the amount needed to
offset the SEC’s annual appropriation cannot be
used to fund the SEC’s operations, nor transferred
to the U.S. Treasury General Fund.
Reported on the Statement
of Net Cost 4
Securities registration,
tender offer, merger,
and other fees from
registrants (filing fees) 1,2
Exchange
Revenue
Collections of filing fees up to $50 million per
fiscal year may be transferred to the SEC’s Reserve
Fund, as directed by legislation. Collections of
filing fees that are not transferred to the SEC’s
Reserve Fund are transferred to the U.S. Treasury
General Fund.
Reported on the Statement
of Net Cost 4
Collections of monetary
sanctions and related
interest 3
Non-Exchange
Revenue
Certain collections of monetary sanctions are
deposited into the SEC’s Investor Protection
Fund in accordance with legislation.
Reported on the Statement
of Changes in Net Position
All other monetary sanctions are not a revenue
source for the SEC, and are either:
(a) Distributed to harmed investors, or
(b) Transferred to the U.S. Treasury
General Fund.
Reported as follows:
(a) Disclosed in Note 16,
Disgorgement and
Penalties
(b) Reported on the
Statement of
Custodial Activity
1
Transaction fee and filing fee rates are calculated and established by the SEC in accordance with federal law and are applied to volumes of activity reported by
SROs or to filings submitted by registrants. Fees are recognized as exchange revenue on the effective date of the transaction or the date of the acceptance of
the filing submission. See Note 1.E, Fund Accounting Structure. The SEC recognizes amounts remitted by registrants in advance of the transaction or filing date
as a liability until earned by the SEC or returned to the registrant.
2 Federal regulations require the return of registrant advance deposits when an account is dormant for three years, except in certain cases where refunds are
not permitted. The Securities Act of 1933 and the Exchange Act do not permit refunds to registrants for securities that remain unsold after the completion,
termination, or withdrawal of an offering. However, Code of Federal Regulations (CFR) Title 17 Chapter II, Part 230, Section 457(p) permits filers to offset a fee
paid (filing fee offset) for a subsequent registration statement (offering) filed within five years of the initial filing date of the earlier registration statement. The total
aggregate dollar amount of the filing fee associated with the unsold securities may be offset against the total filing fee due on the subsequent offering. Unused
filing fee offsets are not an accounts payable to the SEC because registrants cannot obtain refunds of fees or additional services in relation to securities that
remain unsold.
3 The SEC’s non-exchange revenues consist of disgorgement of illegal gains, civil penalties, and related interest.
4 The SEC’s exchange revenues are a means to recover all or most of the total cost of all SEC programs and to deposit excess collections from registrants to the
U.S. Treasury General Fund. As a result, they offset the total costs of the organization in the Statement of Net Cost, rather than individual SEC programs. This
presentation is consistent with the financial accounting concepts described in Statement of Federal Financial Accounting Concepts 2, Entity and Display.
FINANCIAL SECTION | 55
Q. Budgets and Budgetary Accounting
SALARIES AND EXPENSES
The SEC may use funds from the SEC’s Salaries and
Expenses account only as authorized by Congress and
made available by OMB apportionment, upon issuance
of a Treasury warrant. Revenue collected in excess of
appropriated amounts is restricted from use by the SEC.
Collections in excess of congressional spending limits
are unavailable by law and reported as Non-Budgetary
Fund Balance with Treasury. Each fiscal year, OMB
provides the SEC’s Salaries and Expenses account
with quarterly apportionments. These apportionments
include both new budget authority appropriated by
Congress and unused no-year funds (unobligated
balances) from prior years. The Salaries and Expenses
account also receives a small amount of funds related to
reimbursable activity, which are exempt from quarterly
apportionment. See Note 1.E, Fund Accounting
Structure, and Note 14, Statement of Budgetary
Resources and Other Budgetary Disclosures.
INVESTOR PROTECTION FUND
The Dodd-Frank Act provides that the Investor Protection Fund has permanent authority that is available
without further appropriation or fiscal year limitation
for the purpose of funding awards to whistleblowers
and for the operations of the Office of Inspector General
Employee Suggestion Program. However, the SEC is
required to request and obtain apportionments from
OMB to use these funds. The Investor Protection
Fund is financed by transferring a portion of monetary
sanctions collected by the SEC under Section 308 of
the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7246). As
provided by Section 21F of the Exchange Act, sanctions
collected by the Commission payable either to the SEC
or the U.S. Treasury General Fund will be transferred to
the Investor Protection Fund if the balance in that fund is
less than $300 million on the day of collection. See Note
1.E, Fund Accounting Structure.
56 | 2025 SEC AGENCY FINANCIAL REPORT
RESERVE FUND
The Reserve Fund is a special fund that has the authority
to retain certain revenues not used in the current
period for future use. The Dodd-Frank Act provides
that the Fund is available to the SEC without further
appropriation or fiscal year limitation “to carry out the
functions of the Commission.” Amounts in the Reserve
Fund are exempt from apportionment. Collections
arising from securities registration, tender offer, and
merger fees from registrants, other than those that are
deposited in the Reserve Fund, are not available to be
used in the operations of the SEC. See Note 1.E, Fund
Accounting Structure.
BORROWING AUTHORITY
The SEC’s borrowing authority is limited to authority
to borrow funds from the U.S. Treasury in order to loan
funds to the Securities Investor Protection Corporation,
as discussed in Note 10.A, Commitments: Securities
Investor Protection Act.
R. Disgorgement and Penalties
The SEC maintains non-entity assets related to
disgorgement and penalties ordered pursuant to civil
injunctive and administrative proceedings. The SEC
also recognizes a corresponding liability for these assets,
as discussed in Note 1.I, Accounts Receivable and
Allowance for Uncollectible Accounts, and Note 1.L,
Liabilities. Additional details regarding disgorgement
and penalties are presented in Note 11, Funds from
Dedicated Collections, and Note 16, Disgorgement
and Penalties.
NOTE 2. ENTITY AND NON-ENTITY ASSETS
The SEC’s non-entity assets include the following:
(a) disgorgement, penalties, and interest collected and
held or invested by the SEC; (b) disgorgement, penalties,
and interest receivable that will be collected by the SEC;
(c) securities registration, tender offer, merger, and other
fees collected and receivable from registrants, in excess
of amounts deposited in the SEC’s Reserve Fund; and
(d) other miscellaneous receivables and collections such
as registrant monies held temporarily until earned by
the SEC. Additional details are provided in Note 16,
Disgorgement and Penalties.
At September 30, 2025, SEC entity and non-entity assets consisted of the following:
Entity
(DOLLARS IN THOUSANDS)
Non-Entity
Total
Intragovernmental:
Fund Balance with Treasury:
SEC Funds
$
9,674,251
$
—
$
9,674,251
Registrant Deposits
—
69,078
69,078
Disgorgement and Penalties (Note 16)
—
512,851
512,851
Custodial and Other Non-Entity Assets
—
17
17
—
4,419,510
4,419,510
Investments, Net:
Disgorgement and Penalties (Note 16)
Investor Protection Fund
333,570
—
333,570
Advances and Prepayments
19,370
—
19,370
10,027,191
5,001,456
15,028,647
—
5
5
Total Intragovernmental Assets
Cash and Other Monetary Assets:
Disgorgement and Penalties (Note 16)
Accounts Receivable, Net:
SEC Funds
172
—
172
Disgorgement and Penalties (Note 16)
—
205,383
205,383
—
5,261
5,261
290,748
—
290,748
Custodial and Other Non-Entity Assets
Property and Equipment, Net (Note 7)
Total Assets
$
10
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