Sponsor Promote and Compensation Act

II 117TH CONGRESS 1ST SESSION S. 1504 To require the Securities and Exchange Commission to issue rules requiring enhanced disclosures for blank check companies during initial public offering and pre-merger stages, and for other purposes. IN THE SENATE OF THE UNITED STATES APRIL 29, 2021 Mr. KENNEDY introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs A BILL To require the Securities and Exchange Commission to issue rules requiring enhanced disclosures for blank check com- panies during initial public offering and pre-merger stages, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Sponsor Promote and 4 Compensation Act’’. 5 VerDate Sep 11 2014 01:33 May 25, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1504.IS S1504 kjohnson on DSK79L0C42PROD with BILLS 2 •S 1504 IS SEC. 2. ENHANCED DISCLOSURES FOR BLANK CHECK COM- 1 PANIES DURING IPO AND PRE-MERGER 2 STAGES. 3 (a) DEFINITIONS.—In this section— 4 (1) the term ‘‘blank check company’’ has the 5 meaning given the term in section 7(b)(3) of the Se- 6 curities Act of 1933 (15 U.S.C. 77g(b)(3)); and 7 (2) the term ‘‘Commission’’ means the Securi- 8 ties and Exchange Commission. 9 (b) DISCLOSURES.—Not later than 120 days after 10 the date of enactment of this Act, the Commission shall 11 issue rules— 12 (1) establishing enhanced disclosures for blank 13 check companies during an initial public offering or 14 prior to a merger, which shall require the disclosure 15 of— 16 (A) the amount of cash per share expected 17 to be held by the blank check company imme- 18 diately prior to the merger under various re- 19 demption scenarios; 20 (B) any side payments or agreements to 21 pay sponsors, blank check company investors, 22 or private investors in public equity for their 23 participation in the merger, including any 24 rights or warrants to be issued post-merger and 25 VerDate Sep 11 2014 01:33 May 25, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1504.IS S1504 kjohnson on DSK79L0C42PROD with BILLS 3 •S 1504 IS the dilutive impact of those rights or warrants; 1 and 2 (C) any fees or other payments to the 3 sponsor, underwriter, and any other party, in- 4 cluding the dilutive impact of any warrant that 5 remains outstanding after blank check company 6 investors redeem shares pre-merger; and 7 (2) allowing the disclosures required under 8 paragraph (1) to be more explicit to investors, in 9 particular retail investors. 10 Æ VerDate Sep 11 2014 01:33 May 25, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6301 E:\BILLS\S1504.IS S1504 kjohnson on DSK79L0C42PROD with BILLS