The Securities and Exchange Commission has released new rules and amendments to improve investor protection in initial public offerings, or IPOs, of special purpose acquisition companies and de-SPAC transactions, or merger transactions between target companies and SPACs.
The newly adopted rules will require disclosures about SPAC sponsor compensation, conflicts of interest and dilution, among others, and direct registrants to provide additional data about the target company to help investors make more informed decisions regarding de-SPAC transactions, SEC said Wednesday.
According to SEC, the rules also include disclosure requirements related to projections associated with de-SPAC deals and update guidance on the use of projections in all SEC filings.
“Today’s adoption will help ensure that the rules for SPACs are substantially aligned with those of traditional IPOs, enhancing investor protection through three areas: disclosure, use of projections, and issuer obligations,” said SEC Chair Gary Gensler.
“Taken together, these steps will help protect investors by addressing information asymmetries, misleading information, and conflicts of interest in SPAC and de-SPAC transactions,” added Gensler.
The rules will take effect 125 days after publication in the Federal Register.