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SEC adopts a final rule requiring disclosures from SPACs

January 25, 2024

The U.S. Securities and Exchange Commission (SEC) adopted a final rule last night, by a 3-2 vote that would require prospective special purpose acquisition companies (SPACs) to disclose their sponsors, compensation, target companies, and conflicts of interest and to require SPAC targets to register with the SEC. As SSTI covered during the pandemic SPAC boom, the vehicle provides private companies with a lower-scrutiny, higher-cost path to enter the public markets by merging with a listed SPAC. Interest in and performance of deals involving SPACs have waned since 2022, but this is also true of the more traditional initial public offering path to the public markets. The impact of the SEC's changes, therefore, may be difficult to determine until more investors are ready to drive private companies to the public markets. See sec.gov for the final rule, comments, and factsheet.

sec, venture capital