Tuesday, December 29, 2020
On December 22, 2020, the staff of the Securities and Exchange Commission s Division of Corporation Finance issued new guidance with disclosure considerations for special purpose acquisition companies ( SPACs ). The new guidance is reflected in CF Disclosure Guidance Topic No. 11 ( Topic No. 11 ). SPACs, or blank check companies, become public reporting companies through initial public offerings ( IPOs ) and raise money for use in the acquisition of one or more operating companies. SPACs have been an increasingly popular structure and, in 2020, there have been close to 250 SPAC IPOs raising over $80 billion in gross proceeds.
The SEC s new guidance follows earlier comments by then-Chairman Clayton, that the compensation and other interests that affect SPAC sponsors, directors, officers, and other affiliates (referred to in this alert collectively as insiders ) should be clearly disclosed so that public investors understand their financial inc