The federal government shutdown is compelling regulators to put major functions on hold. However, the regulators will respond to emergencies.
Grygo is the chief content officer for FTF & FTF News.
With the shutdown of the U.S. federal government, the financial markets regulators — the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) — have issued guidelines to help staff members and market participants maintain some regulatory requirements.
During the shutdown, the SEC “will have only an extremely limited number of staff members available to respond to emergencies involving the safety of human life or the protection of property, including law enforcement. Certain commission systems will be operating under modified conditions,” according to the SEC.
The number of employees who have been retained to “protect life or property, including engaging in law enforcement activities” is 393, while the total number of SEC employees before the implementation of the shutdown plan was 4,289, according to officials.
“Due to a lapse in appropriations, the SEC is currently operating in accordance with the agency’s plan for operating during a shutdown. Effective Wednesday, October 1, 2025, and until further notice, the agency will have a very limited number of staff members available,” according to SEC officials. “The SEC has staff available to respond to emergency situations with a focus on the market integrity and investor protection components of our mission.”
In particular, the SEC plan includes “the continuing operation of certain commission systems, including EDGAR [the SEC’s Electronic Data Gathering, Analysis, and Retrieval platform].”
As for “any changes in operational status,” they will be posted on the first page of the SEC website. “Additional information is available from the Division of Corporation Finance, the Division of Trading and Markets, the Division of Examinations, and the Division of Investment Management and from a joint statement from the Divisions of Corporation Finance and Investment Management,” the SEC adds.
In advance of the shutdown of SEC operations, the agency decided “which employees should be excepted from furlough because their duties relate to functions that qualify as exceptions to the Antideficiency Act restrictions,” according to the SEC’s operations plan for the shutdown.
“The Office of Human Resources (OHR) will notify excepted employees of their designation. During the period in which there is a lapse in appropriations, the agency will periodically reassess the agency’s functions/activities that need to be maintained and may amend its designation of those excepted from furlough to increase, decrease, or change those so designated,” according to SEC officials.
“Any employee who is excepted must report for duty; if they are sick, then their status would be furloughed. During the shutdown, employees who have not been designated as excepted may not volunteer to work without pay. Such voluntary services are a violation of the Antideficiency Act and will not be permitted under any circumstances,” according to the SEC.
Key SEC functions will cease during the shutdown:
- Enforcement, litigation, and examinations;
- Processing and approvals of filings and registrations by registrants and regulated entities;
- Rulemaking, interpretive questions, and exemptive relief;
- Oversight of self-regulatory organizations [SROs] and the Public Company Accounting Oversight Board; and
- International matters.
More information about the SEC shutdown can be found here: https://shorturl.at/cpXhu
The CFTC has curtailed operations “until additional appropriations are enacted into law and expects that the vast majority of the agency’s operations will cease,” according to its notice. “However, some operations will continue pursuant to exceptions set forth in the Antideficiency Act and elaborated by opinions from the Department of Justice, Office of Legal Counsel (OLC), and guidance from the Office of Management and Budget (OMB).”
Overall, the CFTC “may continue ‘excepted’ functions” that “are deemed necessary for the protection of property, including the markets the CFTC regulates.”
The following are considered excepted functions:
- Those with a continuing source of funding, such as the CFTC’s Customer Protection Fund;
- Those for which a statute or other legal requirement authorizes an agency to obligate funds in advance of appropriations;
- Those that an agency must continue because their continuation is “necessarily implied” from the authorized continuation of other activities;
- Those functions that preserve the safety of life or the protection of property; or
- Those functions that are necessary for the discharge of the President’s constitutional duties.
When the shutdown began on Oct.1, 2025, the CFTC had approximately 543 employees on board, and “31 have been identified as excepted from the restrictions of the Antideficiency Act, because their work conforms to one or more of the excepted functions. This represents approximately 5.7 percent of the CFTC’s staff,” according to the CFTC.
“There are an additional 18 employees in the Whistleblower Office (WBO), Office of Customer Education and Outreach (OCEO), and Division of Administration (DA) who are funded by resources other than annual appropriations,” according to the CFTC.
“The limited contingent of excepted employees has been identified to ensure, to the extent practicable, the oversight of the derivatives markets and to police those markets to ensure they are free of fraud and manipulation,” the CFTC adds.
More about the CFTC’s shutdown plans can be found here: https://shorturl.at/YY4vD
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