SEC Enforcement, Exams On Hold as Government Shuts Down
The government shutdown on Wednesday has put a stop to many regular activities at the Securities and Exchange Commission, disrupting routine examinations and enforcement actions as well as the regulator’s reviews of new product filings.
With Democrats and Republicans at an impasse and no end to the shutdown in sight as of Thursday, the SEC was forced to furlough nearly 4,000 employees, leaving just 393 to oversee emergency enforcement actions and surveil the market for fraud and manipulation, according to the SEC’s shutdown operations plan on its website.
The shutdown, which began Oct. 1 and coincided with the start of the SEC’s new fiscal year, effectively suspends industry examinations.
“Advisors should anticipate delays and not expect to hear from the SEC until the government’s back up and running,” Lori Weston, head of compliance at STP Investment Services, told FundFire. “That might include follow-up requests on routine exams or if they were just hoping for that closing letter.”
The commission’s rulemaking activity is also on ice, while the agency’s 2026 exam priorities – which, in recent years, have been published in early October – will not be released during the shutdown, Weston said.
Read more from Lori Weston and other experts in FundFire.
