The Securities and Exchange Commission says that while certain enforcement and market surveillance activities will continue, it will have to stop performing many of its functions in the event of a shutdown.
The frozen functions could include the registration of securities, accepting and publishing corporate filings, and processing filings related to mergers and acquisitions. The agency’s plan for exactly which functions will continue hasn’t yet been finalized.
The Federal Trade Commission and the Department of Justice are both charged with reviewing mergers and acquisitions to prevent deals that would be anti-competitive. Those reviews may be stalled in the event of a government shutdown.
It’s not clear whether the FTC or the Department of Justice would be able to accept filings for new deals. While both agencies will be able to perform some of their functions, the fate of the merger reviews is not yet known.
One part of the regulatory apparatus that won't shut down is the Federal Reserve. It doesn't rely on Congressional funds and plans to remain open for business as usual. This means that bank regulatory work continues.
The last government shut down lasted three weeks. If Wall Street were unable to perform many of its functions for weeks, it could impact revenues this quarter.
When the government shut down in 1995, the impact was not as severe because the SEC was able to continue to function because it located funds to pay employees. An SEC spokesman told the Wall Street Journal that option is not available this time.
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