The CFA Institute, the organization for investment professionals, is telling regulators to tighten disclosure requirements for SPAC sponsors, Pymnts reports.
This will help the blank check companies be more transparent, the news organization wrote.
The CFA Institute recommends SPAC sponsors should fully disclose any affiliations with investors and other target companies, along with any side deals with anchor or pipe investors.
Better disclosures is one of the seven recommendations from the organization. The CFA Institute is mostly known for looking over the tests to become a chartered financial analyst. It comes after the Securities and Exchange Commission (SEC) reported on the SPACs in March.
The CFA had recommended that there be more detailed information from SPAC executives. According to Amy Borrus, executive director of the Council of Institutional Investors, and a member of the CFA SPAC Working Group, the tougher disclosures are important because many SPACs have an opacity to them, with the possibility for conflicts of interest.
In addition, the CFA has urged that the SEC look into whether there needs to be more rules to tackle SPAC insider trading. The report said there needed to be more scrutiny of the rumors and “priming the pump” communications from social media. Read more.
