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The government shutdown and how it affects financial advisers.

Government Shutdown And How It Affects Financial Advisers

It’s been all over the news- we are in the middle of a government shutdown.

National parks are shut down, TSA agents are calling out sick in what is being called the “blue flu”, and government employees are out looking for temp jobs to pay bills until they can go back to their government jobs.  While these things will certainly impact some of your clients, and you should be ready to help them make it through this *hopefully* short-term cash crunch, you should be aware of how it affects your business as well.

The Securities and Exchange Commission (“SEC”) is operating with a limited number of staff members available.  Unless it is an emergency involving market integrity and investor protection (including law enforcement), then staff members are not responding.  This means that the processing of registrations and all non-emergency examinations and other work will be deferred until the shutdown is over. Certain systems, like EDGAR and IARD, will continue to operate and accept filings.  However, those filings, like your required Form ADV Annual Amendment, will not be reviewed, processed and finalized until the shutdown is over. Depending on how long the shutdown continues, this could mean deadlines for filing could be extended.  Until extensions are confirmed, you should continue to file required filings as required.

The Financial Industry Regulatory Authority Inc. (“FINRA”) is funded by industry fees rather than a government appropriation.  Therefore, the government shutdown has minimal affects on the operations of FINRA.  Broker exams are continuing and all filings will need to be completed as usual.

The Commodity Futures Trading Commission (“CFTC”) is operating with a limited number of staff members available.  They will ensure their market-critical functions continue to be carried out by monitoring futures and swaps marketing, ensuring enforcement activities are carried out and evaluating market activity across futures and swaps to identify any potential impact on the clearing system.  Staff performing these excepted functions will be in communication with key market participants, which will continue their own market and risk surveillance activities.  Much like the SEC, non-emergency examinations, processing of registrations and other work will be deferred until the shutdown is over.

The National Futures Association (“NFA”) is operating normally.

If you have any questions about a pending examination or enforcement action, contact us today at (770) 462-2118.

Author Bio

Leila Shaver is the Founder of My RIA Lawyer, a law firm that provides compliance and legal consulting for financial institutions. With extensive experience as a securities attorney and compliance expert, she has served as Chief Compliance Officer and General Counsel to RIAs, BDs, and TAMPs with billions in assets under management.

Leila understands the challenges RIAs face and is committed to helping RIAs streamline their processes, mitigate risks, and ensure compliance with regulatory requirements. She received her Juris Doctor from Atlanta’s John Marshall Law School and is a West Georgia Young Lawyers’ Association member. Leila has received numerous accolades for her work, including the Carroll County Bar Association’s Outstanding Young Lawyer Award in 2017.

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