The prevalence of special purpose acquisition companies (SPACs) has expanded dramatically over the past year as organizations capitalize on a more streamlined path to public ownership. But key steps still must be taken and regulatory requirements still must be observed to protect shareholders. The U.S. Securities and Exchange Commission (SEC) is watching, and SPAC sponsors need to be ready for more regulatory scrutiny in 2021.

This article explains the SEC’s recent guidance on ways SPAC sponsors can mitigate potential liability related to public offerings and subsequent acquisitions.