Two weeks into the shutdown of the federal government, and there is no end in sight as the Democrat minority digs its heels in, demanding an additional $1.5 trillion added to certain government programs. While the Republican majority wants to pass a continuing resolution (CR) to keep things going while negotiations on a budget continue, for some reason, Democrats see federal sclerosis as a win.
This past weekend, Representative Mike Lawler, a Republican from New York, said the actual cause of the shutdown is Democrat leadership’s fear of the left and a need for optics that show they are battling their nemesis, President Donald Trump.
While the administration has found a workaround to ensure the military is paid and vital services continue, not all parts of the government are operating at full capacity. The Securities and Exchange Commission (SEC) is one of these agencies halting operations. The shuttering of the SEC is impacting capital markets with regulatory updates in limbo and disclosure documents parked on the sidelines.
Ryan Sheridan, Senior Manager of Regulatory Intelligence at Global Relay—a compliant communications provider —says the economy is facing a major stall as capital markets activity, IPOs, product approvals, and more are being halted.
“The shutdown affects all areas of an organization, not just compliance. Revenue-generating activities may be hindered by delays in product registrations and approvals, while disruptions to capital markets and IPO timelines can impact the balance sheets of businesses seeking access to the world’s most liquid markets,” says Sheridan. “From a compliance perspective, the shutdown delays examination schedules and places additional strain on regulatory agencies to complete more work within a compressed timeframe and with fewer resources.”
Sheridan says that when no one is paying attention, things inevitably slip through the compliance cracks.
“Regulatory agencies operate with limited resources, and the volume of work rarely, if ever, slows down. As a result, we can expect ripple effects when oversight is reduced or delayed. Firms with a robust operational structure in place are well-positioned to demonstrate to shareholders and the investing public that they can maintain a consistent level of performance and integrity, regardless of whether regulators are fully operational.”