SEC Adopts Major Changes To SPAC Rules

On Jan. 24, 2024, the Securities and Exchange Commission (the "SEC") adopted final rules to enhance disclosures and provide additional investor protections in initial public offerings (IPOs) for special purpose acquisition companies ("SPACs"). The new rules are intended for SPACs and later business combinations between SPAC IPOs and target companies ("de-SPAC transactions"). Generally, the final rules follow the proposed rules issued by the SEC four years ago in March 2020, but with some significant departures. The SEC did not adopt final rules addressing the status of potential statutory underwriters in de-SPAC transactions, nor did they adopt a safe harbor from the "investment company" definition under the Investment Company Act of 1940 for SPACs.