Proposed SEC disclosure rules for blank-check companies may deter some SPAC-related transactions but leave directors and officers liability insurers feeling more comfortable offering coverage for the risks, even as demand for the transactions has significantly slowed, reports Business Insurance.
The 372-page SEC proposal published in late March would require additional disclosures and remove SPACs’ liability safe harbor under the Private Securities Litigation Reform Act of 1995 for forward-looking statements, a benefit that has not been available to traditional IPOs.
The proposed rules would require additional disclosures about SPAC sponsors, conflicts of interest, sources of dilution and additional information about business combination transactions between SPACs and private operating companies. Read more.
