November 16, 2021

Financial Services Committee Passes Bills on SPACs and Mandatory Arbitration

The U.S. House Committee on Financial Services marked up and passed bills on special purpose acquisition companies ("SPACs"), broker-dealer and investment adviser mandatory arbitration clauses in customer agreements, and hiring practices.

In a statement, Committee Chair Maxine Waters (D-CA) asserted that SPACs have enjoyed lower requirements when compared to traditional IPOs, resulting in increased risk for retail investors. In a memorandum, the Majority Staff described proposals to heighten the disclosure requirements and remove safe harbor protections for forward-looking statements related to SPACs. Majority Staff also provided background on an amendment to eliminate mandatory arbitration clauses in certain customer arrangements.

At the full markup, the following legislation was considered on SPACs and mandatory arbitration:

In addition, the Committee reviewed the following legislation to restructure the procedures for federal credit unions to expel and reinstate members, address barriers for employment at banks and credit unions, and create a grant program within the SEC to assist state securities watchdogs:

All six bills were passed by the Committee.

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