Beware of SPAC Listings, EU Markets Watchdog Tells Investors: Report


Investing in SPACs may not be appropriate for everyone, and additional action may be needed to preserve investor protection, the European Union’s markets watchdog said today, Reuters reports.

More than 400 SPACs have been listed globally so far this year, with Wall Street dominating as Europe plays catch up. But the European Securities and Markets Authority (ESMA) said SPACs “may not be appropriate for all investors” due to risks from dilution, conflicts of interests and uncertainty as to the identification and evaluation of the target company.

It set out how SPACs should tell investors about risks, business strategy and criteria for selecting a target company, with the extent of dilution, such as from payment of fees in shares, illustrated by using tables or diagrams. Read more.

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