Protecting Investors from Excessive SPACs Fees Act of 2021

Bill: 117-hr-5913
Sponsor: full_name: Rep. Sherman, Brad [D-CA-30]
Introduced: 2021-11-09
Policy area: Finance and Financial Sector
Subjects: Corporate finance and management

Financial services and investments

Licensing and registrations

Securities
Latest action: action_date: 2021-11-16
text: Ordered to be Reported in the Nature of a Substitute (Amended) by the Yeas and Nays: 29 - 23.

Summaries:
action_date: 2021-11-09
action_desc: Introduced in House
text: <p><strong>Protecting Investors from Excessive SPACs Fees Act of 2021 </strong></p> <p>This bill limits the transaction or recommendation by registered investment advisers to specified investors of securities belonging to certain special purpose acquisition companies and brokers. Special purpose acquisition companies raise capital through initial public offerings with the intent to acquire other companies. </p> <p>Specifically, these securities may not be recommended to a person who is not an accredited investor unless the related economic compensation is 5% or less or the company makes necessary disclosures to the Securities and Exchange Commission for the protection of investors. An accredited investor must satisfy certain requirements indicating their reduced exposure to financial risk, including those related to income, net worth, or knowledge and experience.</p> </p>

tv_txt: I 117th CONGRESS 1st Session H. R. 5913 IN THE HOUSE OF REPRESENTATIVES November 9, 2021 Mr. Sherman introduced the following bill; which was referred to the Committee on Financial Services A BILL To prohibit registered investment advisers, brokers, and registered representatives of brokers from facilitating the transaction of or recommending the securities of certain special purpose acquisition companies unless certain disclosures are made, and for other purposes.

1. Short title This Act may be cited as the Protecting Investors from Excessive SPACs Fees Act of 2021 . 2. Prohibition relating to certain special purpose acquisition companies (a) Investment advisers Section 206 of the Investment Advisers Act of 1940 ( 15 U.S.C. 80b–6 ) is amended— (1) in paragraph (3), by striking or at the end; (2) in paragraph (4), by striking the period at the end and inserting ; or ; and (3) by adding at the end the following: (5) to facilitate the transaction of, or recommend, securities of a special purpose acquisition company, as defined by the Commission, to a person who is not an accredited investor (as defined in section 2(a) of the Securities Act of 1933 ( 15 U.S.C. 77b )), unless— (A) the promote or similar economic compensation of the special purpose acquisition company is 5 percent or less; or (B) the special purpose acquisition company makes such disclosures to the Commission as the Commission, by rule, may determine to be necessary or appropriate in the public interest or for the protection of investors. . (b) Brokers and registered representatives of brokers Section 15 of the Securities Exchange Act of 1934 ( 15 U.S.C. 78o ) is amended by adding at the end the following: (p) Prohibition relating to certain special purpose acquisition companies (1) In general A broker and any registered representative of a broker shall be prohibited from facilitating the transaction of, or recommending, securities of a special purpose acquisition company, as defined by the Commission, to a person who is not an accredited investor (as defined in section 2(a) of the Securities Act of 1933 ( 15 U.S.C. 77b )), unless— (A) the promote or similar economic compensation of the special purpose acquisition company is 5 percent or less; or (B) the special purpose acquisition company makes such disclosures to the Commission as the Commission, by rule, may determine to be necessary or appropriate in the public interest or for the protection of investors. (2) Registered representative of a broker defined In this subsection, with respect to a broker, the term registered representative of a broker means an individual who represents the broker in effecting or attempting to effect a purchase or sale of securities. .