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The SEC is preparing for a possible government shutdown, focusing on essential functions like market integrity and investor protection. Its EDGAR database will still be available, but some non-essential operations will be paused. Although the SEC’s operations may be affected, the agency will prioritize its main mission of overseeing market activities and protecting investors, especially during uncertain times.
Attorney Jeremy Hogan reacted to the news and wrote, “Dear SEC,Now might be a smart time to file for stays on all non-fraud litigation with no imminent investor harm. In fact, with both the looming shutdown AND incoming New administration, that might be the only ethical thing to do. Truly, Jeremy.” This news comes as cases like Ripple’s are gaining momentum, but it’s still unclear how these cases will be affected by the shutdown.
What Happens Next if The SEC is Shutdown?
If the government shuts down, the SEC will have limited activities because federal agencies can’t operate without funding, except for a few things like protecting property. Companies trying to raise money or handle securities transactions should know that the SEC’s Corporation Finance staff won’t be available to approve registration statements, offering statements, or process those filings.
The SEC won’t process filings that need review, like registration statements or tender offers. Companies won’t get feedback on their filings, and delays will happen once the shutdown ends. The SEC won’t answer questions or handle requests for exemptions or no-action letters.
Gary Gensler previously announced he would retire from the SEC on January 20. President-elect Donald Trump has nominated Paul Atkins, a Republican and former SEC commissioner, to replace him. Atkins, a well-known conservative Washington insider, will take over from Gensler, who has been an aggressive SEC chair under President Joe Biden.