As the US federal government shutdown stretches into its second month, the Securities and Exchange Commission is shifting its focus to keep key market functions running, even as its workforce has been reduced to less than one-tenth of its usual size.
SEC Chairman Paul Atkins, speaking on Fox Business, described the agency’s efforts to maintain oversight with fewer than 400 employees, down from more than 4,200 before the shutdown.
“We cannot process these IPOs under the rules as they are…with this government shutdown,” Atkins said on Monday, noting how the agency has had to revisit older provisions to keep the market moving.
One such measure is the revival of a rule from the Securities Act of 1933, which allows companies to go public 20 days after filing a registration statement, provided they remove a delaying amendment. Atkins said that two companies, Maplight and Navon, have already used this process to launch their initial public offerings, and more may follow.
“About 20 some companies had gone through a fair amount of rounds of comments with our staff,” he said. “And so we said you could pull your delaying amendment, as we call it, and go public after 20 days.”
This approach is limited to firms that were already in the final stages of review before the shutdown. “They were in the final phase of comments,” Atkins said, adding that the SEC’s ability to scrutinize filings and monitor markets remains constrained until the government reopens.
The shutdown’s impact extends beyond IPOs. Work on expanding access to private credit and other alternative assets in 401(k) plans has stalled, according to Atkins. The SEC, in partnership with the Labor Department, had been considering new guidance and possible rule changes to help fiduciaries feel more comfortable including private credit, digital assets, and other alternatives in defined-contribution plans.
“The SEC would be working on those changes, and plot a course to open up the defined-contribution plans to alternative assets while also putting ‘guardrails’ in place,” Atkins said in a CNBC interview last week.
The potential expansion of private credit into the $12.5 trillion 401(k) market could have significant implications for asset managers, with Bloomberg Intelligence estimating that this move could triple private equity managers’ fees over the next decade. But advocates for retail investors, including Democratic Senators Elizabeth Warren and Bernie Sanders, have openly questioned whether broadening alternatives exposure in retirement plans would indeed be beneficial for American workers and retirement savers.
Still, the shutdown has not stopped the launch of new cryptocurrency exchange-traded funds, with several offerings focused on smaller tokens, including Solana, Litecoin, and Hedera’s HBAR, debuting in recent weeks. The SEC’s shutdown guidance allows some filings to become effective automatically after 20 days, a procedural detail that ETF issuers have used to bring new products to market.
Hunter Horsley, chief executive of Bitwise Asset Management, described the timing as advantageous for the launch of the Bitwise Solana Staking ETF, but said the fund would have launched regardless of the shutdown. “SEC Chair Paul Atkins and the crypto task force have been very clear with their intentions of opening up the asset class,” Horsley told Bloomberg News.
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