Uyeda accused the SEC of engaging in “merit regulation,” imposing burdensome regulations on SPACs under the guise of discouraging this alternative to traditional IPOs.
Stricter SEC Rules Raise The Bar For SPAC Offerings : The SPAC Boom and Its Fallout
The SEC’s move comes nearly two years after regulators initially proposed increased oversight for SPACs. These blank-check companies experienced a surge in popularity around 2020, driven by government stimulus and low-interest rates during the COVID-19 pandemic.
However, the SPAC market has faced challenges, including higher interest rates, a supply glut, and poor post-merger stock performances. Last year, only 31 SPACs went public, raising $4 billion, compared to 613 traditional IPOs that raised $162 billion.
Shared Liability and Financial Projections
In addition to heightened disclosure requirements, the new rules stipulate that target companies involved in SPAC mergers will assume liability for disclosures filed during the merger process, known as “de-SPAC.” This shared legal responsibility aims to enhance transparency and accountability.
