While Congress is still working to avoid a federal government shutdown at midnight on Friday, Apr. 8, 2011, there is no certainty of success. In the event of a shutdown, all nonessential services and workers would be affected. That would include at least some of the SEC’s functions.

As reported by CNBC yesterday, the SEC has indicated that “certain enforcement andand market surveillance activities will continue,” it would stop performing “many of its functions” if the federal government shut downs. These functions could include securities registrations, accepting and publishing public company filings, and reviewing proxy statements, including merger proxies, and tender offer filings. As CNBC noted, initial public offerings “may be impossible.” The exact scope of the shutdown’s impact, however, is still not clear.

OUR TAKE: Reporting companies should prepare themselves for the potential impact on the EDGAR filing system, including both ability to file and acceptance of filing, and upon review of registration statements. However long a shutdown may be, it could have a ripple effect on SEC activities and could result in delays for a longer period, as well as adversely impacting the entire investment community.