WASHINGTON -- Banks and other companies bringing new securities issues to market next week could face delays because the Securities and Exchange Commission's funding has been bogged down in the Senate, SEC chairman Arthur Levitt Jr. said Wednesday morning.
The nation's stock market regulator is hamstrung because Congress did not approve its annual appropriation before the government's fiscal year ended Friday. Mr. Levitt suspended all nonessential services and expenses at the SEC.
Starting as early as Tuesday, the SEC's electronic filing system -- which many banks use when they issue bonds, sell stock, or file corporate disclosure reports -- will fall victim to those cutbacks, Mr. Levitt said here at a Financial Executives Institute conference.
"If a company plans an offering on a certain day and that is delayed, that can have" a strong effect on their ability to sell the stock, Mr. Levitt said. A lawmaker whom Mr. Levitt did not identify has placed a hold on the SEC's appropriations, he said.
The bill has already passed the House.
There are 39 bank deals set to raise $2.9 billion in debt and equity securities waiting to go to market, according to Newarkbased Securities Data Co., a data base that tracks all offerings and is owned by the American Banker's parent.
The Senate plans to adjourn Friday. The Associated Press reported that Sen. Orrin Hatch (R-Utah) has held up the bill because of concerns about a tax issue unrelated to the SEC. Sen. Hatch's office did not return calls seeking comment by press time.
If Sen. Hatch removes his hold, the SEC could be funded this week -- by Wednesday evening at the earliest.
Mr. Levitt said the delay also had forced the SEC to revert to old registration fees, which is causing the Treasury to lose roughly $750,000 daily. "The cost to the country appears to be irrelevant to those that have this" hold on the bill, Mr. Levitt said.