Sarah N. Lynch
WASHINGTON (Reuters) - A U.S. government shutdown would temporarily turn off the spigot on the IPO pipeline.
On Thursday the Securities and Exchange Commission announced that if the budget impasse forces a U.S. government shutdown, the agency will be unable to process any company filings.
Translation: No review of new IPO filings and a halt on those already in the works.
Of course, most of these kinds of filings generally take some time to get approval from the SEC in its normal course of business. But those companies already late in the process or those who want the SEC to accelerate their applications will be out of luck, at least for a while.
“New or pending registration statements or applications for exemptive relief (exemption from certain regulations) will not be processed regardless of the status of any review of those filings,” the SEC said on its web site on Thursday.
The White House and the U.S. Congress have until midnight on Friday to strike a deal on the fiscal 2011 budget or face a partial shutdown of the U.S. government.
Although it’s unlikely, a prolonged government shutdown could impact high-profile companies in the IPO process, including Zipcar and Latin American McDonald’s franchise operator Arcos Dorados Holdings.
It also could impact the SEC Q&A process for companies like LinkedIn and Toys R Us Inc, which are on file but haven’t yet set terms, and those who may file soon.
After a company submits its registration for an IPO it answers questions from the SEC, and amends its filing, if needed.
Companies can still submit various documents online, such as financial statements and spot disclosures, but they will not be processed.
A limited number of enforcement staff also will be on hand in the event there are pressing issues of misconduct or outright fraud that cannot wait.
But unless there are “emergency situations involving the safety of human life or the protection of property,” do not expect SEC staffers to respond to calls or e-mails.
Reporting by Sarah N. Lynch in Washington, with additional reporting by Clare Baldwin in New York; editing by Carol Bishopric