SEC Chair Paul Atkins Says Government Shutdown Is 'Beginning To Bite' But IPOs Are 'Still Going To The Market'

SEC Chair Paul Atkins said the ongoing government shutdown is starting to impact U.S. markets but highlighted that the agency remains partially operational to keep essential functions running.

The Shutdown Is ‘Beginning To Bite’

“It's beginning to bite,” Atkins said, referring to the disruption caused by the lapse in government funding, while noting that initial public offerings, which the Securities and Exchange Commission is tasked with regulating, are “still going to market,” while speaking on CNBC’s Squawk on the Street, on Wednesday.

Despite the agency’s limited capacity due to the shutdown, Atkins said “we’re still doing our surveillance over the marketplace to make sure that it’s all working as it should.”

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The ability to move forward with IPOs depends heavily on how far along companies are in the SEC review process. “If IPOs have gone all the way through the comment process and are just waiting to price and go to market, we’ve given guidance on how to do that,” Atkins said. Still, he admitted the situation “does kind of crimp our style.”

According to Atkins, the Anti-Deficiency Act makes it illegal “to work during a government shutdown when there's no appropriations,” with only certain exceptions allowed, such as enforcement matters.

Shutdown Starting To Affect The Economy

Last week, U.S. Treasury Secretary Scott Bessent said that the ongoing federal government shutdown was showing signs of impacting the economy. “It’s starting to affect the real economy. It’s starting to affect people’s lives,” he said.

Bessent also raised the issue of stalled IPOs, saying that the SEC not being able to function has led to a gridlock, preventing companies from making the necessary filings. He said that the situation could give rise to significant economic repurcussions, and even evolve “into a serious national security issue.”

Moody's Analytics Chief Economist Mark Zandi warned last week that this shutdown could last for a record “five, six weeks,” until essential services start to break. “Something is going to break,” he said.

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