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SEC Cracks Down On SPACs

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SEC Cracks Down On SPACs

B
Benzinga

14 Views • Sep 28, 2021

Description

The United States Securities and Exchange Commission is asking auditors for blank-check companies to be more strict. The issue relates to accounting for public shares of these shell companies. These shares should be considered temporary—also known as mezzanine equity. With the change, most special purpose acquisitions companies will fall below the minimum equity requirement for the NASDAQ Capital Market Tier. These companies will drop to the Global Market Tier. While the implications are unclear, regulators believe less vetting puts investors at risk, triggering the policy shift.