SEC Proposes SPAC Rules

On March 30, 2022, the Securities and Exchange Commission (the "SEC" or the "Commission") voted 3-1 to propose new rules and amendments relating to initial public offerings ("IPOs") by special purpose acquisition companies ("SPACs") and subsequent business combination transactions between SPACs and private operating companies ("de-SPAC transactions").¹

Background.

SPACs emerged in the 1990s as an alternative to blank check companies regulated pursuant to Rule 419 under the Securities Act of 1933 (the "Securities Act"). Between 2010 and 2019, the average number of SPAC IPOs was 22 per year, with 248 occurring in 2020 and 613 occurring in 2021.² SPAC IPOs raised more than $83 billion in 2020 and more than $160 billion in 2021. During the last two years, more than half of all IPOs were conducted by SPACs.³