At the beginning of the federal shutdown, the SEC announced that it would continue to operate as normal “for a few weeks” because of its ability to access a pool of funds not available to other federal agencies. But as we continue into the third week of the federal shutdown, that ambiguous timeline of a “few weeks” may be nearing an end. In the event the SEC runs out of its backup funding, it has a contingency plan, which it released in late September.
Following is a summary of what functions will, and won’t, continue in the event of an SEC shutdown.
These SEC activities will continue:
- Emergency enforcement and litigation matters (including temporary restraining orders and actions necessary to protect public and private property)
- Monitoring and processing of tips, referrals, and complaints in order to identify “emergency” matters
- EDGAR and other filing systems
- Monitoring of money market funds, broker-dealers in financial distress, and any international market developments with potential impacts on the U.S.
- Internal human resources and security functions necessary to transition into shutdown capacity
These SEC activities will be discontinued:
- Ongoing litigation activities and investigations that are non-emergency or not necessary for the protection of property.
- Debt collection efforts or distribution of funds to harmed investors
- Review and approval of registration applications for entities and new financial products
- Review of periodic reports and other filings
- Non-emergency support to registrants
- Non-emergency rule-making activities, issuance of no-action letters, and processing of applications for exemptive relief
- Routine oversight of self-regulatory organizations and the PCAOB
- Processing FOIA requests
The SEC estimates that only 252 of its 4,149 employees will be “designated as excepted” — i.e., they will continue to work as normal. In case you were wondering, SEC employees are not allowed to show up to work for free:
“During the shutdown, employees who have not been designated as excepted may not volunteer to work without pay. Such voluntary services are a violation of the Antideficiency Act and will not be permitted under any circumstances.”
Read the full SEC shutdown procedure and list of continued and discontinued functions.