Today, 49 law firms, including Mayer Brown, signed a joint statement responding to a recent action against a SPAC asserting that SPACs are investment companies under the Investment Company Act of 1940 because proceeds from their IPOs are invested in short-term US Treasury securities and qualifying money market funds.

The signing law firms view the assertion that SPACs are investment companies as without factual or legal basis and believe that a SPAC is not an investment company under the 1940 Act if it (i) follows its stated business plan of identifying and engaging in a business combination with one or more operating companies within a specified period of time and (ii) holds short-term US Treasury securities and qualifying money market funds in its trust account pending completion of its initial business combination.

Read the joint statement.

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