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U.S. SEC considering new rules to tackle risky SPACS, chief tells Congress

WASHINGTON (Reuters) – The U.S. Securities and Exchange Commission (SEC) is considering new rules to address concerns around material disclosures and investor protections amid a surge in the use of special purpose acquisition companies (SPACS) as capital-raising vehicles, its new chair will tell lawmakers.

Gary Gensler, in prepared testimony to the financial services and general government subcommittee of the U.S. House Appropriations panel on Wednesday, said that overseeing SPACS has also placed demands on the resources at the watchdog, which has seen a 4% decline in its staff overall since 2016.

He added that the Division of Enforcement’s staff had 6 fewer staff on board than it did in fiscal year 2016, while its Division of Corporation Finance is currently 20% smaller than it was five years ago.

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