It has been more than three weeks since the government shutdown began, and the effects are starting to ripple across the financial industry. With roughly 90 percent of SEC staff furloughed and only critical operations continuing, the agency’s oversight engine has effectively stalled with no end in sight. Examinations, registration reviews and most filing activity are on hold, while only critical enforcement and market-surveillance functions continue, leaving registered market participants uncertain about when normal communication will resume and navigating an increasingly unpredictable landscape for timing, reporting and compliance planning.

For registered investment advisers and private fund managers, the shutdown adds new layers of uncertainty: delays in filings, postponed examinations and limited communication with regulators, all while compliance obligations remain unchanged. What began as a political standoff in Washington has quickly become a test of operational readiness for advisers managing complex portfolios during this regulatory standstill. The result is a rare moment where the absence of oversight creates as much pressure as its presence.

Silver’s Compliance Team outlines how this shutdown is affecting registered investment advisers and private fund managers and what firms can do now to stay compliant and prepared during this rare period of regulatory silence.

Shifting Regulatory Landscape

Under its contingency “Operations Plan Under a Lapse in Appropriations,” only 393 of the SEC’s 4,289 employees remain active during the shutdown and only essential functions such as emergency enforcement, market surveillance and certain litigation support will remain active, while examinations, registration reviews and most correspondence are on hold. Systems such as EDGAR and IARD remain open for filing, but submissions requiring reviews, acknowledgments and effective-date determinations from the SEC Staff are suspended, meaning IPOs and registration of new entities are mostly frozen.

In a nod to the paralysis in review processes, the SEC’s Division of Corporation Finance issued temporary guidance permitting issuers to file IPO registration statements that become automatically effective after 20 days, a stop-gap measure intended to mitigate the freeze in acceleration order processing. The accommodation, however, carries potential mispricing issues for the offerings utilizing it and enforcement risk once the staff returns because the usual correspondence and sign-offs from regulators have been absent.

Immediate Impacts & Strategic Implications for Private Fund Managers

Examinations & Registration Timing

Firms currently undergoing a routine SEC examination, or those anticipating one, now face uncertainty, but it is critical that they continue to meet deadlines and upload relevant documents even though examiners may not reply during the shutdown. The silence may feel like relief, but regulatory obligations have not paused and firms will still need to evidence their compliance with all applicable requirements during this period.

For new registrants filing Form ADV or amendments, review queues are effectively frozen, meaning launch timelines may slip and operational planning must account for increased timing risk. Investment advisory firm looking to launch right now will likely need to wait for SEC staff to return and begin processing registration applications again before accepting capital from third-party investors, unless they are able to rely upon an established exemption from registration.

Filings, Portfolio Exits & Capital-Markets Disruption

Even for established advisers, submissions such as Section 13 filings, ADV amendments, exemptive-relief requests and audit filings may be accepted via portals but will not receive timely review or acknowledgment. It is important to maintain detailed records evidencing the order of events and steps taken by the firm if any securities filing deadlines are missed due to delayed processing times caused by the government shutdown. Bottom line: even with routine reviews on hold for the foreseeable future, firms must stay vigilant to avoid compliance missteps during this period of limited oversight.

In the capital-markets arena, private fund managers whose portfolio companies anticipated IPOs or other exit events may face real delays. Without SEC staff to issue acceleration orders, hold periods are extended, distributions to limited partners may shift and investor expectations must be managed accordingly. The key takeaway here is that this delay is not just operational, it’s strategic.

Compliance Environment & Risk-Readiness

Reduced oversight does not reduce responsibility. Managers must continue to meet custody audit deadlines, ongoing regulatory filing requirements, marketing-practice disclosures and record-keeping obligations. It is imperative that firms not mistake this lull as a safe harbor, since the SEC is expected to immediately resume examinations and enforcement initiatives once funding is restored.

Silver’s Take

Key Recommendations

At Silver, we advise private fund managers to review and implement the following guidance:

• Document and communicate delays. Maintain a detailed log of pending filings, registrations, amendments and examination correspondence that are impacted by the shutdown. Share relevant-ranking updates with LPs and stakeholders, maintaining transparency.
• Continue to meet obligations. Filing portals remain live; statutory deadlines remain binding. Do not assume extensions or regulatory leniency.
• Use the pause proactively. The slowdown in day-to-day oversight is an opportune time to conduct internal gap-analyses and mock examinations. Prioritize high-risk areas such as custody, marketing, cybersecurity, AML and record-retention.
• Reassess exit-timelines and investor-communications. If a portfolio company exits (e.g., IPO) or distribution was expected, revisit the timeline, evaluate alternative scenarios and inform investors proactively about a potential delay.

Silver’s Outlook: This is Not a Pause, but a Pivot

This shutdown is not a regulatory holiday; it is a recalibration. The absence of oversight doesn’t eliminate risk, it redistributes it. And when the SEC returns to full staffing, the pent-up review and enforcement backlog may accelerate the pace of interaction with registered market participants.

For private fund managers, the message is clear: this is a strategic moment and preparedness is not optional, it is imperative. The goal is not merely to stay compliant; it is to use this pause to get ahead. Firms that strengthen compliance foundations, refine documentation and manage stakeholder communications will emerge in a stronger operational position, while those who simply wait it out may face compressed timelines, backlog exposure and reputational risk when normal oversight resumes.

Silver recommends that managers treat this as a strategic window to fortify compliance programs, enhance documentation and improve communication with investors. Firms that act now will be best positioned when the SEC switches back on and regulatory scrutiny returns with full force.

At Silver, we help firms turn periods of uncertainty, like this one, into opportunities for stronger compliance and operational resilience. Our Compliance Team is here to help you navigate the current challenges resulting from this shutdown and strengthen your compliance footing for the months ahead. To learn more about how Silver can support your firm’s compliance needs, contact Silver’s Compliance Team today at [email protected].