SEC Proposes Sweeping Rules Applicable to SPAC IPOs and De-SPAC Transactions

On March 30, the commissioners of the Securities and Exchange Commission approved much-anticipated proposed rules relating to special purpose acquisition companies. The proposed rule changes cover a wide range of topics, including expanding underwriter liability for regulatory filings in connection with de-SPAC transactions, exposing target companies to liability under the Securities Act of 1933 for such filings and expanding and revising disclosure requirements applicable to SPAC IPOs and de-SPAC transactions. While some of the proposed rules simply codify existing SEC staff positions and guidance or standard SPAC industry practice, the proposed rules may have substantive impacts on SPACs, SPAC sponsors, underwriters, private companies seeking to go public via a de-SPAC transaction, institutional and retail SPAC investors and others.

The proposed rules are available here and a summary SEC “Fact Sheet” on the proposed rules is available here.