Twenty-two months after publishing proposed new rules for special purpose acquisition company (SPAC) transactions (click here for the Fact Sheet, and click here to read our Loeb Client Alert), the U.S. Securities and Exchange Commission (SEC) has indicated that it will consider adopting new rules and amendments at a January 24, 2024 open meeting.
The proposed rules were an attempt by the SEC to address the following primary concerns:
- Amount of sponsor compensation and other costs, and their dilutive effects on a SPAC’s shareholders
- Use of projections in de-SPAC transactions
- Lack of named underwriters in de-SPAC transactions that would typically perform gatekeeping functions
- Potential conflicts of interest between sponsors and retail investors
Many involved in SPAC transactions commented on the proposed rules, so it will be interesting to see if the SEC modifies any of the rules in response to those comments.