Government Shutdown Hits Funds, Fund Boards

Many news reports have recounted how the partial government shutdown has affected government employees, shuttered national parks, and unsettled the stock market. But few, if any, have given much thought to how the shutdown affects the oversight responsibilities of mutual fund directors.

Yes, the impact of government shutdown has trickled down to mutual funds, and thus its fund boards. While there is little that fund directors can do to end the shutdown, they should be aware of how it can affect the funds that they oversee.

The Securities and Exchange Commission announced that until further notice, the agency will have a very limited number of staff members available, and they will only respond to "emergency situations involving market integrity and investor protection, including law enforcement." The SEC has adopted an Operations Plan that kicked in last month, which provides for the SEC to furlough most of its employees.