Safe Harbor For Special Purpose Acquisition Companies In Securities Laws Of U.S.

Special purpose acquisition company in the U.S.securities market is a manifestation of financial innovation,which originated from the "blank check company" that was often used as a tool for securities fraud in the past,and is based on the model of "shell company + acquisition" to help the acquired private operating go public and trade their securities,fulfilling the same function as an IPO model.This model has the advantages of low cost,high efficiency,and high returns for the issuer,making it an outstanding model during COVID-19 attacking and capital market downturn in 2020.However,prior to this,SPACs were less regulated,and on which securities fraud happened frequently due to the inherent conflicts of interest in their structure,causing raising concerns of SEC.On March 31,2022,SEC published a new regulation for SPAC on its official website,"Special Purpose Acquisition Companies,Shell Companies and Projections," which brought SPAC into the scope of regulation,the two most prominent rules of which are related to the design of the "safe harbor".This thesis aims to analyse the purpose and enlightment of the two "safe harbor" rules.Chapter One introduces the characteristics and development history of the special purpose acquisition company,and analyzes its similarities and different functions with IPO,Back Door Listing and Depositary Receipts.In order to provide an objective and comprehensive introduction of the SPAC,this chapter elucidates the advantages and disadvantages of SPAC and its development from wild growth to being regulated strictly and then to improvement under industry self-discipline.Chapter Two introduces the features and applications of "safe harbor",and analyses the concepts of "fraud" and "lemon market",aiming to illustrate the importance of "safe harbor" to promote information disclosure in the securities market.Chapter Three analyzes the legislative purpose of the first "safe harbor" rule issued by SEC,that is,moving SPAC out of the "safe harbor" of forward-looking statements.This chapter lists the legal provisions of "safe harbor" of forward-looking statements,blank check company,penny stock,and explains that as a variant of blank check company,SPAC should not be included in the "safe harbor" of forward-looking statements.If the predictive information released by SPAC is seriously inconsistent with the actual situation,investors can sue SPAC on the grounds of misrepresentation.The rule actually fills the legal loophole of SPAC.Chapter Four aims at the second rule to set up a "safe harbor" under the Investment Company Law for SPAC so as not to be strictly regulated by the Investment Company Law.SPAC is similar to "investment companies" in terms of asset and conflicts of interest.But according to the Investment Company Law,SPAC is illegal and difficult to continue.SEC sets up the "safe harbor" under the Investment Company Law for SPAC,which meeting the conditions in the "harbor" are not regarded as investment companies and can continue to develop and enrich the financial methods.Chapter Five explains the enlightment of "safe harbor" for Special Purpose Acquisition Companies in Securities Laws of U.S.,and comments on the necessity of introducing "safe harbor" for forward-looking statements in Several Provisions of the Supreme People’s Court on the Trial of Civil Compensation Cases for Misrepresentation in the Securities Market.In the conclusive part,the thesis summarizes the illumination for China from the attitude of SEC toward financial innovation and shows that appropriate flexible financial regulatory system is beneficial to the development of financial innovation.