March 11, 2022
I am submitting comments in favor of the proposed rule change described by SR-NYSE-2021-45.
Many others have already pointed out that SPACs are generally \"opt-out\" and can have incentives that don't align both the sponsor and the investor.
The only novel idea that I want to bring up here is that many times when a SPAC is announced, part of the appeal is the sponsor reputation. You decide to invest with that sponsor on account of the belief that they will find a deal that creates value for their investors.
With this rule change, SPAC sponsors could no longer \"leverage\" their reputation into convincing investors. Instead, they would have to bring a deal to the table for investors, and that would be the substitute. Rather than investing because the sponsor has a good reputation, I can evaluate their ability when they bring a deal to me. And if the sponsor is bad, then they will bring a worse deal, which, by default, I will be protected, because I don't have to \"opt-out\".
As a SPAC investor, I have to look for things I should avoid to protect myself, such as worrying about high redemption rates, or sponsors that are bad actors that propose bad deals just to get a deal done. However, as a SPARC investor, I only have to decide whatever deal the sponsor brings me is valuable enough that I give them access to my capital.
The easiest way to put it is that in SPACs, the sponsors have the keys to the capital and I have to tell them to give it back if I catch them doing something I don't like.
With SPARC, I always have the keys to my capital, and if they're doing something bad, they already won't have access to my capital, as it's something I have to allow and opt-in to.
In both scenarios, I as an investor, am responsible for my own money and for buying at whatever price may be manipulated or subject to rumor or hype.
However, in the SPARC model, there is a much safer fail-safe and it's easier as an investor to manage investments in a SPARC.