Securities Law, NYSE, NASDAQ & OTC Markets Listings & Compliance

What Happens at the SEC During a Government Shutdown?

In its “Operations Plan Under a Lapse in Appropriations and Government Shutdown,” the SEC lays out with surprising candor the bare-bones framework it must follow when Congress fails to fund it. Here’s a breakdown of what the SEC will and will not do during a funding lapse.

Core Continuities: What Stays Alive

1. EDGAR remains open — for basic filing only

One of the few bright spots for market participants is that the SEC expects EDGAR to continue accepting filings, including registration statements, periodic reports, proxy materials, and amendments. That said:

• The SEC notes that only minimal personnel will support EDGAR operations during the shutdown (for example, handling logins, password resets, and technical support) 
• But the agency won’t be able to review or act on most filings during the shutdown. 

2. Very limited functions proceed

Under the Antideficiency Act (and long-standing legal guidance), federal agencies may continue operations that are (among other criteria):

• Necessary to protect life or property.
• Necessary to discharge the President’s constitutional duties.
• Required for the orderly shutdown of the agency.
• Those expressly allowed by law to continue despite funding lapses. 

Accordingly, in a shutdown, the SEC plans to retain a skeleton crew that can:

• Respond to emergencies (e.g., threats to market stability or integrity).
• Perform essential facility and IT security, network operations, cybersecurity protections, and ensure the physical security of SEC premises.
• Support HR/administrative functions for those limited staff who remain on duty.
• Maintain communications and manage post-shutdown restart planning.

However, note that these are minimal operations, strictly governed by what the law allows without appropriated funds.

What the SEC Won’t Be Doing

During the shutdown, the SEC’s hands are tied in many respects. Here is a non-exhaustive list of tasks that will largely be paused or unavailable:

• No staff review or comment letters on registration statements, proxy filings, or other disclosures.
• No issuance of no-action, interpretive, or exemptive letters, except possibly under very narrow emergency/property-protection exceptions. 
• No advisory guidance, oral or written, to issuers or stakeholders on securities law questions. 
• No acceptance of responses to comment letters or further correspondence by staff during the shutdown.
• No processing of requests for acceleration or effectiveness of registration statements (other than in limited circumstances) during the shutdown.
• No proxy or shareholder proposal reviews / no-action letters under Rule 14a-8 will be issued.
• No interpretive or legal review for corporate filings or for relief under Regulation S-X, etc., except in narrow emergencies.
• No responses from the SEC’s Division of Trading and Markets to routine queries about pending filings, rulemaking, or transaction matters. 

As the Division of Trading and Markets has already publicly stated: “EDGAR will accept registration statements and other filings; however, staff will be unable to process filings, provide interpretive advice, issue no-action letters or conduct any other normal Division activities.”

Some Nuanced “Workarounds” and Technical Exceptions

Even in shutdown mode, the SEC has built in limited flexibility or special provisions:

• WKSIs and shelf takedowns: Because some registration statements by well-known seasoned issuers (WKSIs) are automatically effective on filing, they may still be able to access markets (if no staff review is required). Non-WKSIs with already effective shelf registrations might still execute takedowns using prospectus supplements. 
• Emergency relief under Rule 3-13: The Division of Corporation Finance has stated that in a true emergency (where delaying action would risk protection of property), it may consider a request for relief under Rule 3-13 of Regulation S-X. However, such action is tightly circumscribed by Antideficiency Act constraints. 
• Requests submitted to “emergency” email addresses: For example, the Division of Trading and Markets references an emergency contact email ([email protected]) for urgent situations. 
• Counting business days: The SEC has clarified that days during a shutdown count as “business days” for rule-based timing purposes (unless they’re weekend or federal holidays).

Post-shutdown “catch-up” and acceleration: After operations resume, the SEC may consider requests to accelerate effectiveness or revisit certain filings that were delayed or dormant during the shutdown.

If you have questions about taking your company public or would like to speak with a Securities Attorney, Hamilton & Associates Law Group, P.A. is ready to help. Our Founder, Brenda Hamilton, is a nationally known and recognized securities attorney with over two decades of experience assisting issuers worldwide with going public on the Nasdaq, NYSE, and OTC Markets. Since 1998, Ms. Hamilton has been a leading voice in corporate and securities law, representing both domestic and international clients across diverse industries and jurisdictions. Whether you are taking your company public, raising capital, navigating regulatory challenges, or entering new markets, Brenda Hamilton and her team deliver the experience, strategic insight, and results-driven representation you need to succeed.

To speak with a Securities Attorney, please contact Brenda Hamilton at 200 E Palmetto Rd, Suite 103, Boca Raton, Florida, (561) 416-8956, or by email at [email protected].

Hamilton & Associates | Securities Attorneys
Brenda Hamilton, Securities Attorney
200 E Palmetto Rd, Suite 103
Boca Raton, Florida 33432
Telephone: (561) 416-8956
Facsimile: (561) 416-2855
www.SecuritiesLawyer101.com