SEC Adopts New SPAC Rules Expanding Disclosure Requirements

Executive Summary

On January 24, 2024, the Securities and Exchange Commission (the "SEC"), in an extensive 581-page release, adopted new rules and amendments (the "Final Rules")¹ to require new disclosures designed to implement heightened investor protections in initial public offerings ("IPOs") by special purpose acquisition companies ("SPACs") and in SPAC business combination transactions ("de-SPAC transactions"). The Final Rules were adopted nearly two years after the SEC first proposed them in March 2022 (the "Proposed Rules"),² when the SPAC market was still booming.

The Final Rules require, among other things, additional disclosures about SPAC sponsors, conflicts of interest, sources of dilution, and other aspects of de-SPAC transactions. Further, the Final Rules address issues relating to projections made by SPACs and their target companies, including the Private Securities Litigation Reform Act of 1995 (the "PSLRA") safe harbor for forward-looking