With the federal government now shut down, the continued closure of the Securities and Exchange Commission (SEC) has become more than an inconvenience—it’s an economic threat. Treating the SEC as “non-essential” is a serious mistake that undermines investor protection, halts capital formation, and stalls the innovation that drives our economy.
The SEC is not a peripheral agency; it is part of the backbone of our capital markets. When it’s closed, no company can go public, no new exchange-traded funds (ETFs) can be launched, and no registration statements can be processed. Every stalled IPO or frozen filing means lost liquidity, delayed investment, and diminished confidence.
For investors, this shutdown creates a vacuum. The inability to bring new companies to market or introduce new investment products deprives both professional and individual investors of opportunity. Employees counting on liquidity events are left waiting. Financial Advisors and individual investors can’t access new tools, and capital that would normally flow into fueling growth sits idle.
Equally concerning is the freeze in financial product innovation. Every ETF must pass through the SEC’s review process. These funds have democratized investing by offering individuals transparent, low-cost access to diversified strategies. When the SEC stops, that progress stops. New ETFs that could help investors adapt to changing markets—technology, AI, infrastructure, or income-focused products—are trapped in limbo.
The damage also extends to small and midsize businesses, hurting Main Street itself. Through Regulation A and crowdfunding, the SEC created legitimate, transparent pathways for smaller enterprises to raise funds from individual investors. With the agency closed, those filings are suspended. Entrepreneurs ready to launch offerings now face indefinite delays—unable to raise funds, hire workers, or expand.
Each day the SEC remains dark, filings pile up, deals fall apart, and confidence fades. Some will argue that the agency can simply catch up later. But markets don’t work that way. Timing matters. Deals are priced in real time, market windows open and close, and uncertainty kills momentum. After past shutdowns, it has taken months for the SEC to clear backlogs and restore normal operations.
The SEC safeguards investors, ensures transparency, and sustains the trust that makes U.S. markets the envy of the world. It is not optional. Policymakers should formally designate the SEC as essential—because investor protection and capital formation are the foundation of our economy.
Andrew Corn is the founder and head of strategy of E5A Integrated Marketing. He is not a lawyer or investment banker. However, he has provided input in the structuring of numerous deals, and his firm has supported large successful capital raises using “general solicitation” for private REITs and PERE, as well as publicly traded ETFs and mutual funds.