Data / Federal rules / 2024-01853

Special Purpose Acquisition Companies, Shell Companies, and Projections

The Securities and Exchange Commission published this final rule in the Federal Register on February 26, 2024. It took effect on July 1, 2024.

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What the agency says

The Securities and Exchange Commission ("Commission") is adopting rules intended to enhance investor protections in initial public offerings by special purpose acquisition companies (commonly known as SPACs) and in subsequent business combination transactions between SPACs and private operating companies (commonly known as de- SPAC transactions). Specifically, we are adopting disclosure requirements with respect to, among other things, compensation paid to sponsors, conflicts of interest, dilution, and the determination, if any, of the board of directors (or similar governing body) of a SPAC regarding whether a de-SPAC transaction is advisable and in the best interests of the SPAC and its security holders. We are adopting rules that require a minimum dissemination period for the distribution of security holder communication materials in connection with de-SPAC transactions. We are adopting rules that require the re-determination of smaller reporting company ("SRC") status in connection with de- SPAC transactions. We are also adopting rules that address the scope of the safe harbor for forward-looking statements under the Private Securities Litigation Reform Act of 1995. Further, we are adopting a rule that would 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 are adopting amendments to a number of financial statement requirements applicable to transactions involving shell companies. In addition, we are providing guidance on the status of potential underwriters in de-SPAC transactions and adopting updates to our guidance regarding the use of projections in Commission filings as well as requiring additional disclosure regarding projections when used in connection with business combination transactions involving SPACs. Finally, we are providing guidance for SPACs to consider when analyzing their status under the Investment Company Act of 1940.

Key facts

Document number

2024-01853

Type

Final rule

Action

Final rules; guidance

Agency

Securities and Exchange Commission

Published

February 26, 2024

Takes effect

July 1, 2024

Dates

Effective date: The final rules are effective on July 1, 2024.

Docket

Release Nos. 33-11265; 34-99418; IC-35096; File No. S7-13-22

Regulation ID (RIN)

3235-AM90

Code of Federal Regulations

17 CFR 210; 17 CFR 229; 17 CFR 230; 17 CFR 232; 17 CFR 239; 17 CFR 240; 17 CFR 249

Topics

Accountants; Accounting; Administrative practice and procedure; Banks, banking; Employee benefit plans; Holding companies; Insurance companies; Investment companies; Oil and gas exploration; Reporting and recordkeeping requirements; Securities; Utilities

Pages

170

The document on federalregister.gov PDF

Other documents from the Securities and Exchange Commission

Everything from the Securities and Exchange Commission · Rules on accountants · Rules on accounting · Rules on administrative practice and procedure · Published in February 2024

Read from the Federal Register API, last updated 2026-10-24. The document on federalregister.gov is the official record; dates and dockets can change through later corrections. Free to reuse with credit to SpecStream under CC BY 4.0.