Regulatory Outlook | 10.11.21
FINRA Targets SPACs in Latest Exam Sweep
FINRA has launched an exam sweep into brokerages' activity involving special purpose acquisition companies (SPACs), prompted by securities regulators' concerns that both the launch of the SPAC shell and the de-SPAC merger could be harmful to investors. FINRA is asking targeted firms to disclose SPAC activities from 1 July 2018 through 30 September 2021. The agency will review the firm's policies and procedures related to public offerings, due diligence, suitability and communications with clients, and evaluate how firms select customers for SPAC recommendations. The sweep follows SEC Chairman Gary Gensler's disclosure that he has asked agency staff to propose updating rules to ensure "investors are better informed about the fees, costs and conflicts that may exist with SPACs."
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