On June 13, 2022, the Committee submitted a comment letter to the Securities and Exchange Commission (the “SEC”) regarding its proposed rule on special purpose acquisition companies (“SPACs”), shell companies, and projections (the “Proposed Rule”).
As set forth throughout the letter, the Committee’s review of empirical data on SPACs and de-SPACs finds that SPACs play an important role in helping companies raise capital and enter the U.S. public markets, which have been otherwise shrinking for years. In regulating SPACs, the SEC should therefore seek to preserve SPACs’ viability as a path to the public markets. The Committee supports the provisions of the Proposed Rule that would enhance transparency for investors regarding the SPAC and de-SPAC process but has concerns with other aspects of the proposal that could discourage the use of SPACs rather than enhancing the way they work for companies and investors.
Part I of the letter sets forth data on the SPAC and de-SPAC markets, demonstrating their important role in U.S. capital markets in recent years. Part II briefly summarizes the principal provisions of the Proposed Rule. Part III is an analysis of the policy and legal basis for the Proposed Rule, setting forth recommendations that, in the Committee’s view, would enhance transparency for SPAC investors while preserving SPACs’ viability as a path to the public markets.
The full letter is available here.