ASA Statement on SEC SPAC Proposal

WASHINGTON – The American Securities Association (ASA) released the following statement after the Securities and Exchange Commission (SEC) today issued a proposal to reform the Special Purpose Acquisition Company (SPAC) market:

“While ASA welcomes the SEC’s focus on SPACs, we are reviewing the proposal and its implications for the SPAC market and investors closely,” ASA CEO Chris Iacovella said. “Effective reform in the SPAC market should increase transparency to investors while still allowing the market to function efficiently.”

Last year, ASA submitted the following recommendations to improve SPAC transactions:

• SPAC sponsors should provide disclosure regarding their economic stake and potential outcomes from a future merger transaction;

• SPACs should clearly disclose to investors that a deal may not come to fruition and that shares may only be redeemed at a certain price;

• Investors should also be provided with merger information and a proxy statement (or a summary document of the merger document), including information for how the valuation was calculated;

• A Form S-4 and proxy statement should be filed at the same time (or shortly thereafter) a deal is announced;

• SPACs should also publicly file a description of the transaction and how they determined valuation;

• SPAC sponsors should be subject to at least a one-year lockup in their shares from the date that the merger is completed; and

• Any sales within a certain period (e.g. three years) by a SPAC sponsor should be considered a “distribution” under SEC rules.

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ASA’s regional financial services companies work in communities across the country to create jobs, grow the economy, and increase prosperity for all Americans. The ASA exclusively represents the capital market and private client interests of its members and seeks to promote free market principles making it easier to access financial advice and capital. ASA members help Americans save for retirement, provide Main Street businesses with capital to grow, and advise hardworking Americans how to create and preserve wealth. For the latest updates follow @AmerSecurities and learn more at http://americansecurities.org/.