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SEC Commissioner Peirce Cautions Against "Well-Intentioned" Regulations on SPACs

"A knee-jerk reaction to events like those surrounding the meme stocks or problems associated with two of today's discussion topics - self-directed IRAs and SPACs - is to try to dissuade retail investors from participating at all."
SEC Commissioner Hester M. Peirce, at Investor Advisory Committee Meeting (March 11, 2021)
"A knee-jerk reaction to events like those surrounding the meme stocks or problems associated with two of today's discussion topics - self-directed IRAs and SPACs - is to try to dissuade retail investors from participating at all."
SEC Commissioner Hester M. Peirce, at Investor Advisory Committee Meeting (March 11, 2021)

At an SEC Investor Advisory Committee meeting, SEC Commissioner Hester Peirce cautioned against "overly prescriptive" regulations intended to protect retail investors and "well-intentioned increased" regulatory obligations around special purpose acquisition companies ("SPACs").

With regard to SPACs, Commissioner Peirce highlighted the difficulty in assessing risks due to the two-staged SPAC process (an initial public offering and subsequent business combination transaction). Ms. Peirce stated that the SEC should ensure SPACs provide disclosure at each stage of the investment process, and asked the Committee if the SEC Division of Corporation Finance ("CF") Disclosure Guidance Topic No. 11 ("Special Purpose Acquisition Companies") is "helpful and sufficient." (See previous coverage on the CF Disclosure Guidance here.)

Primary Sources

  1. SEC Statement, Hester M. Peirce: Remarks at Investor Advisory Committee Meeting
  2. SEC Press Release: SEC Investor Advisory Committee to Meet Remotely on March 11

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