New SEC regulations, effective 125 days post-publication in the Federal Register, mandate enhanced disclosure by SPACs on conflicts, sponsors, compensation, and dilution risks. Also, “Safe harbor” protections are removed, aligning de-SPAC treatment with traditional IPOs, and will impose Securities Act registration and increased liability for target companies.
According to the SEC news release statement: “The new rules and amendments require, among other things, enhanced disclosures about conflicts of interest, SPAC sponsor compensation, dilution, and other information that is important to investors in SPAC IPOs and de-SPAC transactions. The rules also require registrants to provide additional information about the target company to investors that will help investors make more informed voting and investment decisions in connection with a de-SPAC transaction.”
