The exact timing of when the SEC would cease some functions is unclear. The agency says it will remain open and operational on Tuesday, even if a budget deal is not reached. But industry watchers say a more extended shutdown would impair the SEC's ability to foster capital raising.
(Read more: Senate rejects House bill, shutdown looms)
"There's been a huge recovery in the number of IPOs this year relative to the last few years," said Izzy Klein, a financial services lobbyist with the Podesta Group. He said an SEC slowdown in approvals could hurt that recovery.
Federal government funding runs out at midnight, the end of the 2013 fiscal year. Members of the House of Representatives and the Senate would need to agree on a plan to pay for the government, even temporarily, to keep the doors open on Tuesday.
Lawmakers have averted several such crises in the past. They have been unable to agree so far, in large part because a number of Republicans want to delay President Barack Obama's signature health reform law as part of any deal to fund the government.
A shutdown would not mean a financial free-for-all.
(Read more: Obama: I'm 'not at all' resigned to a shutdown)
Bank regulators, including the Federal Reserve and the Consumer Financial Protection Bureau, would stay open because they do not rely on Congress for funding.
The SEC and the Commodity Futures Trading Commission, on the other hand, do rely on government appropriations for funding. But they plan to maintain some market-monitoring activities.
In fact, some experts say shutting down the government would be a minor blip for markets compared with what would occur later this month if lawmakers do not raise the debt ceiling.
"The conventional wisdom is this is a precursor for the debt ceiling fight, which will have immediate and substantial ramifications for the economy," said Jason Rosenstock, head of government relations at ML Strategies in Washington.