![]() Federal courts and the Commission may find that other parties involved in securities distributions, including other parties that perform activities necessary to the successful completion of de-SPAC transactions, are ‘statutory underwriters’ within the definition of underwriter in Section 2(a)(11). This discussion, however, is not intended to provide an exhaustive assessment of underwriter status in the SPAC context, and neither is it intended to limit the definition of underwriter for purposes of Section 2(a)(11) of the Securities Act. In addition, we have discussed above some of the activities that are sufficient to establish that the SPAC IPO underwriter is participating in the distribution of target company securities. “We note that proposed Rule 140a addresses the underwriter status of only the SPAC IPO underwriter in the context of a de-SPAC transaction. Moreover, the SEC is not just limiting its interpretation of statutory underwriters to traditional IPO underwriters, which are the investment banks underwriting the firm commitment offering, but also including other parties involved in the De-SPAC Transaction. The proposing release describes this new rule as “clarifying the underwriter status of SPAC IPO underwriters in connection with de-SPAC transactions,” and that the new rule should “motivate them to exercise the care necessary to help ensure the accuracy of the disclosures in these transactions by affirming that they are subject to Section 11 liability for registered De-SPAC transactions.” As phrasing the new rule as a “clarification,” the SEC is effectively saying that it currently views these participants as underwriters in the de-SPAC transaction, even if the SPAC IPO closed 18 months ago. In particular, the SEC is proposing a new rule, Securities Act Rule 140a, that would deem anyone who has acted as an underwriter of the securities in a SPAC IPO and takes steps to facilitate a de-SPAC transaction or any related financing transaction (e.g., the PIPE financing) or otherwise participates (directly or indirectly) in the de-SPAC transaction to be engaged in a distribution and to be an underwriter in the de-SPAC transaction. ![]() The proposals were aimed at enhancing disclosures and liabilities in connection with SPAC IPOs as well as the subsequent business combinations (De-SPAC Transactions) between SPACs and private operating companies.įrom a securities lawyer’s perspective, one of the most controversial aspects of the proposals relates to the SEC’s proposed rule 140a related to underwriter liability in De-SPAC Transactions. This Equity Capital Markets update covers a range of hot topics including global macroeconomic trends, results of the Deloitte UK Q2 2022 CFO Survey and discussion of the global market for SPACs.In March 2022, the Securities and Exchange Commission (SEC) proposed sweeping new rules to regulate the disclosures and liabilities associated special purpose acquisition companies (SPACs). Succeeding in uncertain markets – UK Equity Capital Markets Summer 2022 update Please note that different outcomes may be achieved for organisations which are able to secure “Foreign Private Issuer” status.Ī short overview document outlining SEC reporting and accounting considerations that can help CFOs plan for successful SPAC transactions. This Financial Reporting Alert goes into the details behind financial reporting requirements and SEC regulatory requirements for SPACs that are Domestic registrants. ![]() ![]() This is intended to help CFOs gain an understanding of (1) the risks associated with these investment vehicles and (2) the need for a comprehensive project management plan to meet the demands of an accelerated merger timeline.Īccounting and SEC Reporting considerations for SPAC transactions A short overview document outlining the SPAC landscape, trends, lifecycle and post-completion activities. ![]()
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