The Impact of the U.S. Government Shutdown on SEC Operations and Registrants

Amid the divided negotiations in Congress over fiscal year 2026 funding, the U.S. federal government officially entered a partial shutdown on October 1, 2025. Among the many affected agencies is the Securities and Exchange Commission (“SEC”), whose daily functions are critical to capital markets, public companies, and IPO registrants.

Before the shutdown took effect, the SEC’s Division of Corporation Finance (the “Division”) issued announcements explaining how it would operate with limited staff. These announcements set out what types of filings and communications will continue, which activities are paused, and how registrants should proceed in the interim.

This blog explores how the government shutdown affects the SEC’s operations, what that means for companies preparing to go public, and what registrants, founders, and investors can do to stay compliant and minimize disruption.

Why Is the U.S. Government Shutting Down?

The federal government’s partial shutdown began at 12:01 a.m. ET on October 1, 2025, after Congress failed to reach an agreement on appropriations for the 2026 fiscal year. Without legislation authorizing new spending, the Anti-Deficiency Act prohibits federal agencies from operating normally, except for limited functions necessary to protect life or property.

How Does the Government Shutdown Affect the IPO Registrants?

The SEC is one of many agencies required to scale back its operations until Congress approves funding. On September 30, the SEC announced that it would halt the majority of its normal activities. Starting at 5:30 p.m. EST, the Division of Corporation Finance and the Division of Investment Management would no longer be in a position to act on requests for the effectiveness of registration or offering statements.

While the SEC’s core market-protection functions (such as enforcement and emergency monitoring) continue at a reduced level, most registration reviews, comment processes, and interpretive guidance will stop until appropriations are restored. The following summarizes the key impacts for companies in the process of going public or conducting registered offerings.

A. Filing on EDGAR

The SEC confirmed that its EDGAR electronic filing system remains fully operational throughout the shutdown. Registrants can continue submitting registration statements, offering statements, and all other required reports. Public companies must also keep filing their periodic and current reports on Forms 10-K, 10-Q, and 8-K, as well as proxy materials, tender-offer filings, and beneficial-ownership reports.

Importantly, even while the government is shut down, business-day counting continues for SEC-related deadlines. Therefore, companies should stay mindful of due dates and ongoing filing obligations.

However, the SEC staff is not reviewing or commenting on filings and cannot declare registration statements effective or qualify Form 1-A offering statements until appropriations resume. EDGAR acts purely as a receiving system; companies can file, but progress toward effectiveness or comment resolution will not occur during the lapse in funding.

B. Fee Calculations and Emergency Fillings

During the shutdown, only a limited number of the SEC staff members are working, and their availability is restricted to fee calculations and emergency filing relief. Registrants who need assistance with either issue must email CFEmergency@sec.gov with a description of the situation and contact information.

The Division will not respond to other inquiries or interpretive questions. All routine communications, including requests for guidance or staff confirmation, are suspended until operations resume. Reports of tips or complaints should continue to be submitted through the SEC’s official Tips, Complaints, and Referrals (TCR) system rather than to the SEC staff.

C. Amendments, Effectiveness, and Delaying Amendments

The shutdown has a direct impact on how companies manage amendments and effectiveness requests. The Division cannot grant acceleration of effectiveness or qualification while operations are paused.

Certain filings, specifically post-effective amendments filed under Rule 462(c), still become effective automatically upon filing. Other amendments that include substantive changes, however, cannot be declared effective. Companies that need to update a prospectus or offering statement should not proceed with an offering until the updates are made and the filing is complete.

Some issuers may choose to remove the delaying amendment from a registration statement to allow it to become effective automatically after 20 days under Section 8(a) of the Securities Act. The SEC cautions that this approach carries significant liability and antifraud risk if the filing contains incomplete or inaccurate information. The registration statement must be final and include all required disclosures.

If the SEC reopens before the 20-day period ends, staff may request that the company reinsert the delaying amendment so the comment process can continue normally. Similarly, if unresolved staff comments exist, registrants should not remove delaying amendments until those comments are addressed.

When operations resume, the Division may also ask issuers whose statements became effective by operation of law to amend their filings and restore delaying language.

D. Ongoing and Post-Effective Offerings 

For offerings that were already effective before the shutdown, certain activities may continue. Companies with effective shelf registration statements can still conduct shelf takedowns, since prospectus supplements do not require SEC staff action.

Automatically effective registration statements, such as Form S-8 for employee benefit plans or Form S-3ASR for Well-Known Seasoned Issuers (WKSIs), will continue to become effective automatically during the shutdown period.

However, issuers that are not WKSIs or that lack an effective shelf will likely experience delays in bringing new offerings to market. The SEC cannot act on any acceleration requests for effectiveness until appropriations are restored.

E. Interpretive, No-Action, and Proxy-Related Requests

The SEC’s ability to issue interpretive guidance, no-action letters, or exemptive relief is suspended during the shutdown, except in narrow emergency situations under Rule 3-13 of Regulation S-X. In those cases, registrants may email CFEmergency@sec.gov and explain the emergency circumstances and property interests at risk.

Beyond these limited exceptions, the SEC is not reviewing shareholder-proposal no-action requests under Rule 14a-8, preliminary proxy statements, or other similar filings. Companies may still file these materials, but they should be aware of potential enforcement risk and negative proxy-advisor recommendations if they exclude proposals without SEC concurrence or court approval.

Preliminary proxy or information statements must still be filed at least 10 calendar days before definitive materials are distributed. Once normal operations resume, the staff may review previously filed materials and respond to pending requests.

What Can Registrants Do During the Shutdown?

Even though the SEC’s review functions are paused, registrants can still take proactive steps to stay compliant and ready for reopening. All required filings must continue to be made on time through EDGAR, and the responsibility for accurate disclosure remains fully with the company and its advisors.

Companies with pending offerings should consult with counsel to determine whether to adjust the timing or consider temporary alternatives. During this period, issuers can continue internal due diligence, finalize audits, and prepare updates that will be filed as soon as operations resume. Founders and sponsors should maintain open communication with investors and underwriters to explain expected delays and outline next steps.

The SEC has stated that any change to its operating status will be posted on its website, so registrants should monitor for updates daily and be ready to respond promptly once the Division reopens.

Practical Takeaways for Companies and Executives

• EDGAR remains operational, but the SEC cannot declare registration statements effective or qualify Form 1-A offering statements until appropriations are restored.
• Only a small number of staff are available to address fee calculations and emergency filing relief through the emergency email: CFEmergency@sec.gov.
• Interpretive, no-action, and exemptive-relief functions are paused except for limited emergencies.
• Companies must continue meeting filing deadlines and ensure disclosures are accurate and complete.
• IPO candidates and non-WKSIs should anticipate timing delays and build flexibility into deal schedules.

Final Thought

The recent U.S. government shutdown highlights the impact of federal operations on the capital markets. While EDGAR continues to receive filings, the SEC’s ability to review, comment, and accelerate registration statements is suspended until funding resumes.

For founders, sponsors, and investors, the best course is preparation and transparency. Maintaining compliance, keeping disclosures current, and communicating clearly with stakeholders and attorneys will help ensure a smoother restart once appropriations are restored and the SEC returns to full capacity.

Our firm regularly advises clients on SPACs, de-SPACs, and M&A transactions. We keep up with the latest news and trends in the industry and are ready to advise accordingly. If you would like us to assist with your questions regarding SEC filings or government shutdown-related impacts, please contact our team.

Authors: Nick L. Torres, Esq. and Weiwei Lu

Contact Person: Nick L. Torres, Esq. and Zhiqi Zheng, Esq.