The SEC adopted the final rule for Special Purpose Acquisition Companies (SPAC), Shell Companies, and Projections on January 24, 2024. The final rule will become effective 125 days after publication in the Federal Register with the final date to be determined (TBD). The compliance date will be the effective date for the final rule other than the new structured data requirements included in subpart 1610 of Regulation S-K, which will receive a one-year phase-in period for compliance. 

Who is Impacted?

Special purpose acquisition companies (SPACs) and target companies with subsequent business combination (de-SPAC transactions). 

Recap of Important Requirements

The final rule includes these important requirements (among other things):

• Require additional disclosures about SPAC sponsor compensation, conflicts of interest, dilution, the target company, and other information that is important to investors in SPAC IPOs and de-SPAC transactions;
• Require, in certain situations, the target company in a de-SPAC transaction to be a coregistrant with the SPAC (or another shell company) and thus assume responsibility for the disclosures in the registration statement filed in connection with the de-SPAC transaction;
• Deem any business combination transaction involving a reporting shell company, including a SPAC, to be a sale of securities to the reporting shell company’s shareholders; and
• Better align the regulatory treatment of projections in de-SPAC transactions with that in traditional IPOs under the Private Securities Litigation Reform Act of 1995 (PSLRA)

iXBRL Requirements

New requirements per subpart 1610 of Regulation S-K will require tagging with Inline XBRL and the compliance for XBRL tagging will begin one-year after initial effective date of final rule. 

SEC Resources

• Press Release
• Final Rule
• SEC Fact Sheet

We are Here to Help

Should you want to discuss support options available in meeting the new SEC SPAC requirements, don't hesitate to reach out to your Account Rep, CSM or PSM.

Please make sure to follow this page for more updates as the effective dates are announced.