Clifford Chance

SEC Proposes to Enhance Protections for SPAC Investors

April 26, 2022

The Securities and Exchange Commission proposed new rules and amendments that would enhance protections for investors in special purpose acquisition companies and subsequent business combination transactions between SPACs and private operating companies (de-SPAC transactions). In short, the proposed rules are designed to close perceived gaps between the regulatory requirements applicable to de-SPAC transactions and those for traditional initial public offerings. The SEC will accept public comments on this proposal until the later of May 31, 2022 and 30 days following the publication of the proposing release in the Federal Register.

In her dissenting statement concerning this proposal SEC Commissioner Peirce expresses concern that a typical SPAC would not meet the proposal’s parameters without significant changes to its operations, economics, and timeline. In this briefing, we discuss selected aspects of this proposal likely to be of greatest interest to market participants and their potential impacts.

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