Effects of the Federal Government Shutdown on Investment Companies and Advisers Registered With the Securities and Exchange Commission


Without the passage of a fiscal year 2011 appropriations bill or another continuing resolution, the federal government will “shut down” on April 9, 2011. Investment companies and advisers registered with the Securities and Exchange Commission (the “SEC”) will be affected by the shutdown, as described in this Alert.

The SEC has indicated that the shutdown will halt all but “essential” functions of the agency and that the SEC’s capacity to perform many of its routine operations will be greatly reduced. Under the SEC’s contingency plan outlining its operations in the event of a shutdown, only a small number of essential workers will remain on the job to respond to emergency situations, including law enforcement, allegations of ongoing fraud and misconduct, and certain market-monitoring activities. In addition, the SEC’s Commissioners will continue working, with the assistance of one designated member of the SEC staff (the “Staff”), as government rules prevent the Commissioners from being furloughed. The impact of the shutdown on the following areas of SEC operations may be of particular interest to registered investment companies and registered investment advisers...

Please see full alert below for more information.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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