TheCorporateCounsel.net

Last week, the SEC posted a notice indicating that the NYSE had withdrawn a proposed rule change that would have extended the deadline for a de-SPAC transaction from 36 to 42 months in certain circumstances. This Cooley blog notes:

The proposal would have extended that deadline to 42 months under certain circumstances. As proposed to be amended, Section 102.06e would have provided that the SPAC “will be liquidated if it has not (i) entered into a definitive agreement with respect to its Business Combination within (A) the time period specified by its constitutive documents or by contract or (B) three years, whichever is shorter or (ii) consummated its Business Combination within the time period specified by its constitutive documents or by contract or forty-two months, whichever is shorter.” If the SPAC failed to comply, the NYSE would promptly commence delisting procedures.

The NYSE proposal was originally posted in April, and in May, the SEC posted a notice of designation of a longer period for SEC action. Then, in July, the SEC posted an Order instituting proceedings to determine whether to approve or disapprove the proposed rule.

The SEC’s Order Instituting Proceedings raised a number of concerns with the NYSE proposal, and the only comment letter that was submitted by the Council of Institutional Investors expressed concerns about the proposal that were consistent with the SEC’s concerns. With all of these headwinds, it is not too surprising that the NYSE ultimately withdrew the proposed rule change.

– Dave Lynn