Federal Government Shutdown and the SEC: What You Need to Know

Who may be interested: Registered Investment Companies; Investment Advisers

Quick Take: The federal government will shut down at 12:01 a.m. on Saturday, December 21^st, unless Congress passes a funding plan today, December 20^th. In the event of a government shutdown, government activities will cease and non-essential functions will stop as of December 21^st, 2024. The SEC’s operational status will change accordingly, though certain SEC systems, including EDGAR, will remain operational. Staff of the Division of Investment Management will be unavailable except to answer questions relating to fee calculations and emergency filing relief.

Every year, Congress is required to pass spending bills to keep the government funded. If it is unable to do so, it can pass a continuing resolution, which extends funding until a certain deadline. This year, Congress extended the deadline in a continuing resolution to December 20^th. Since then, Congress has failed to come to an agreement on a new spending bill. Today is the deadline, and the government will shut down at 12:01 a.m. tomorrow if Congress does not act.

As the SEC is a federal agency, the SEC’s operating status will change concurrently with the federal government in accordance with the SEC’s plan for operating during a government shutdown. Division of Investment Management staff will be unable to respond to questions about pending matters or act on requests for acceleration of the effective date of a pending registration statement or qualification of a pending offering statement. However, investment companies can continue to make filings on EDGAR.

Pursuant to the Securities Act of 1933, many post-effective amendments to registration statements are automatically effective upon filing or after a certain number of days. Until the SEC is operational again, any filed amendments will become effective after the full time period in the applicable rule has passed. Filings that are not automatically effective or that are subject to SEC review would not be reviewed or processed during a shutdown, and registrants could expect significant delays in processing once the shutdown has ended.

The SEC staff will not be able to review or respond to no-action requests until the government shutdown has passed.

You can find the Division of Investment Management’s announcement with more details here. The SEC’s full operations plan in the case of a government shutdown is available here.