March 11, 2022
These comments are in favor of the proposed rule change described by SR-NYSE-2021-45.
The \"opt-out\" structure of current SPACs ties up investor capital. This can be problematic, especially for retail investors with limited financial resources. Currently, buying SPACs is akin to buying into an unknown entity, oftentimes only based on trust in the sponsor.
The proposed subscription warrants as part of a SPARC structure go a long way to improve some of the shortcomings of SPACs.
There are concerns around subscription warrants in that they may be manipulated by rumors or incomplete deals. This is not a new concern for SPACs in general as existing common shares, warrants, and options on SPACs could potentially be manipulated. Because these subscription warrants will not be optionable they will in fact be less subject to manipulation than other equities, provided the float size is sufficient.
The SEC has long stated their interest in improving blank check investment vehicles and these subscription warrants will be a step in the right direction.