[Federal Register Volume 59, Number 208 (Friday, October 28, 1994)]
[Unknown Section]
[Page ]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-26762]
[Federal Register: October 28, 1994]
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SECURITIES AND EXCHANGE COMMISSION
[Securities Exchange Act Release No. 34885/October 24, 1994]
Customer Service Plan of the Securities and Exchange Commission
In response to Executive Order 12862 issued as part of the Vice
President's National Performance Review, the Securities and Exchange
Commission (SEC) developed a customer service plan. The goal of the
plan is to enhance investor protection through an improved investor
education effort and a redirection of resources to augment the SEC's
responsiveness to investor concerns and complaints. The plan submitted
to the Vice President on September 8, 1994 was modified slightly on
October 24, 1994. The modified plan is as follows:
The SEC is responsible for protecting investors through enforcement
of the federal securities laws and oversight and regulation of the
securities markets. Individual and institutional investors have
trillions of dollars invested in securities and mutual funds in the
United States and abroad. While the SEC does not approve or guarantee
any investments, it is responsible for ensuring that securities issuers
provide full disclosure of material information to investors and that
markets adhere to fair standards.
Investors deal directly with the SEC through its Office of Consumer
Affairs, which is responsible for processing and responding to
inquiries and complaint letters from the public. In fiscal 1993, the
SEC received over 34,700 investor complaints and inquiries. Although
the SEC has no authority to provide legal representation to investors,
the SEC may request information from brokerage firms and securities
exchanges regarding particular problems. The SEC obtains invaluable
leads from investors; approximately 18% of investigations each year
have resulted, at least in part, from investor complaints.
The general public also deals directly with the SEC through its
Public Reference Rooms located in Washington, D.C., New York City, and
Chicago. These facilities maintain a library of corporate filings,
Commission releases, and other documents for use by the public. The SEC
staff provide assistance to the public in locating and obtaining
information and in using the agency's electronic filing system, known
as EDGAR. In fiscal 1993, these facilities had nearly 45,000 visitors
requesting nearly 63,000 documents and microfiche, and over 121,000
telephone inquiries.
In its role of supervising the public securities markets, the SEC
processes and reviews the filings of more than 13,000 entities that are
required to file prospectuses, annual and quarterly reports, proxy
statements and other informational documents. It also acts on the rule
filings of the various stock exchanges and self-regulatory
organizations. Efficiency is paramount for these time-sensitive
filings.
Because of its diverse customer base and the importance of its work
to investors and the financial markets, efficient and effective
customer service is a top priority at the SEC. The SEC has undertaken
several initiatives to improve its ``user- friendliness'' and to
educate investors.
Mutual Fund Surveys
In November 1993, the SEC conducted a voluntary telephone
consumer survey of up to 1,000 households to obtain background
information regarding the public's understanding of the risks involved
with purchasing mutual funds sold through banks. The survey found that
28% of those surveyed believed that all mutual funds sold through banks
are insured, and of people who have bought funds through banks, 66%
believed that money market mutual funds are federally insured.
Between January and March 1994, the SEC arranged four
focus groups of 10 to 20 investors each to obtain more detailed
information from individual investors of mutual funds. The first two
groups addressed the SEC's concern that consumers do not adequately
understand the risks involved with investing in mutual funds sold
through banks. The other two sessions provided the SEC insight on
investor's understanding of mutual fund prospectuses and the
information they derive from the prospectuses.
Education
On March 10, 1994 the SEC, along with other securities
regulators, released a brochure, Invest Wisely, which provides basic
information to help investors select a brokerage firm and salesperson,
identify decisions to be made before making an initial investment
decision and address a problem that may arise. This brochure also helps
investors identify questions they should ask, provides background
information about the securities industry, and describes practices that
may signal a problem.
Consumer Affairs Advisory Committee
On March 10, 1994, Chairman Levitt announced the creation
of the Consumer Affairs Advisory Committee. The purpose of this
committee is to open a channel through which the SEC can receive advice
and information to help it better address the needs of investors in
their role as consumers of financial products and services. Made up of
members with diverse backgrounds and expertise, the committee will
continue to explore broad, fundamental issues of concern to investors,
especially disclosure and communication of information from
corporations, brokerage firms, investment companies and investment
advisers to their investors/clients. The committee also will address
regulatory simplification and examine how the SEC can be more
responsive to consumer needs and effective in helping to resolve
consumer problems.
Streamline Action on Rule Filings
Since taking office in July 1993, Chairman Levitt has
taken significant steps to virtually eliminate the backlog of overdue
rule filings by the stock exchanges and the self-regulatory
organizations (SRO). The Commission has proposed rule amendments that
would increase the number of SRO rule filings that may become effective
immediately, and instituted procedures to ensure that the Commission
will take final action on other filings within a six-month period.
Reorganize the SEC's Enforcement Efforts
The SEC's ability to hunt down securities violations has
been enhanced by placing all regional SEC offices under the supervision
of the Enforcement Division and relocating certain operations. This has
streamlined the organization and provided more efficient allocation of
resources.
The SEC plans to take further action this fall regarding education
of investors and improvement of customer service, including:
The SEC will publish and distribute a second brochure,
entitled Invest Wisely: Mutual Funds, to provide investors with basic
information on mutual funds. The SEC plans to create a series of
brochures to help investors become better educated consumers.
The SEC will conduct additional surveys and focus groups
to develop other meaningful and useful solutions for better education
of investors.
The SEC will disseminate information to investors via an
electronic bulletin board on Internet. Such information will include
Investor Alerts, descriptions of new or emerging types of securities
fraud; Information for Investors, articles on a variety of specific
topics; and SEC publications that presently are available only in
hardcopy.
The SEC will establish a toll-free consumer hotline to
provide investors and the general public with useful information
regarding common consumer inquiries. The topics will include how to
file investor complaints; what the SEC can and cannot do for investors;
how to obtain information from public companies, brokerage firms and
other investment representatives; and how to order certain publications
from the SEC.
The SEC will install a new and improved Information Line
in the headquarters Public Reference Room to provide callers with
access to general information about the SEC, a means to request
facsimiles of the recorded general information and the ability to
transfer within the SEC to specific offices for detailed information.
The SEC is providing enhanced training to its consumer
affairs specialists at headquarters and in the field offices. A special
review of the consumer affairs function is underway and several
recommendations have been implemented to improve the agency's
responsiveness to consumers.
SEC's Commitment to Customers
The SEC makes a commitment to its customers to do the following:
1. Provide courteous, timely and responsive answers to all
customers.
2. Suggest alternatives or options to customers when the SEC is
unable to provide direct assistance.
3. Obtain comments and suggestions from customers on how to improve
or modify the SEC's consumer affairs program.
Jonathan G. Katz,
Secretary.
[FR Doc. 94-26762 Filed 10-27-94; 8:45 am]
BILLING CODE 8010-01-P
