Important Things to Know About the Looming Government Shutdown

The commencement of the 2026 federal fiscal year on October 1, 2025, is looming, bringing along with it the possibility of a government shutdown if Congress fails to pass the required appropriations bills or a temporary funding measure. A government shutdown would lead to a significant disruption in operations, affecting not only federal agencies but also the Securities and Exchange Commission (SEC) and its functions.

As Congress races against time to avert a funding gap, public companies need to prepare for potential disruptions in SEC operations and other federal agency functions. Although the SEC’s Division of Corporation Finance has not released any specific guidance ahead of a possible shutdown on October 1, 2025, they have done so in the past, most recently in March of the same year. It is crucial for issuers to be aware of the key points from the SEC’s previous guidance and take necessary steps to navigate through a looming shutdown.

Key Considerations

– Filers can still submit all required filings under the Securities Act of 1933 and the Securities Exchange Act of 1934 through the Electronic Data Gathering, Analysis, and Retrieval system (EDGAR).
– Staff activities within the Division of Corporation Finance are expected to be significantly limited during a shutdown, with functions such as expediting registration statements, issuing comment letters, approving no-action requests, and providing interpretive guidance likely to be put on hold.

For well-known seasoned issuers (WKSIs), offering activities can continue as their Form S-3 or F-3 registration statements are automatically effective upon filing. Non-WKSIs with existing shelf registrations can proceed with offerings through prospectus supplements as needed.

Preparation and Actions

Prior to a potential shutdown, issuers should:
– Prepare or finalize shelf registration statements for non-WKSIs without effective registration statements already in place.
– Ensure uninterrupted access to EDGAR by verifying login credentials before staffing limitations come into effect.

In case of a shutdown, issuers are advised to:
– File Exchange Act filings in a timely manner via EDGAR.
– Proceed with offerings using prospectus supplements for non-WKSIs and post-effective amendments for WKSIs if required.
– Stay vigilant for unexpected developments or a prolonged shutdown period.

Despite a government shutdown disrupting various SEC processes, issuers must not overlook their disclosure obligations. It is essential for public companies to proactively plan in advance of any potential shutdown to maintain operational continuity during a period of financial uncertainty.