If Congress fails to pass a budget or a continuing resolution to maintain funding, much of the federal government will shut down at 12:01 a.m., EST, on December 17, 2011. On December 14, the SEC issued a summary of the major SEC functions to be continued and discontinued during a lapse in appropriations. This summary mirrors SEC guidance issued on April 7, 2011, when the federal government faced a similar threat of shutdown (see Legal Update, SEC Outlines Limited Functions if the Federal Government Shuts Down).

In the event of a government shutdown, the SEC will operate with a limited staff that will respond only to emergency situations. The staff will not be available to review and accelerate effectiveness of registration statements for securities offerings, provide interpretive advice or issue no-action relief. However, EDGAR will accept filings and remain fully functional. Reporting companies should continue to make all Exchange Act filings on a timely basis.

On April 8, 2011, in response to a similar threat of government shutdown, ten law firms issued a consensus report containing a helpful Q&A on the effect of the potential shutdown on capital markets transactions and public company reporting.