Section 1 Short title
This Act may be cited as the “Protecting Investors from Excessive SPACs Fees Act of 2021”.
Protecting Investors from Excessive SPACs Fees Act of 2021
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.
Sec. 2 Prohibition relating to certain special purpose acquisition companies
Investment advisers— Section 206 of the Investment Advisers Act of 1940 (15 U.S.C. 80b–6) is amended—
in paragraph (3), by striking “or” at the end;
in paragraph (4), by striking the period at the end and inserting “; or”; and
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.”
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.”