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- UBS is preventing its financial advisers from selling certain SPAC shares to its customers, according to a report by CNN Business.
- SPACs have grown in popularity as companies have moved away from the traditional IPO during the pandemic.
- UBS made the decision due to the limited availability of research on SPACs prior to its mergers with private companies, according to CNN.
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The boom in SPACs last year is being viewed with caution by UBS and its financial advisers, according to a report by CNN Business.
UBS is restricting financial advisors from selling certain SPAC shares to its wealth management clients in the Americas due to a lack of information and research on blank check investment vehicles prior to its mergers with private companies, according to the CNN.
Since the beginning of 2020, more than 500 SPACs, or special-purpose acquisition companies, have gone public, as the traditional initial public offering route has become more difficult in a remote work environment. Twenty-four SPACs went public last week, and more SPACs have been launched in 2021 than in the entire year 2020, according to data from Dealogic.
UBS is said to allow its consultants to trade SPAC shares for clients only in an unsolicited manner or when advised by the client. UBS consultants can sell SPAC shares to customers as soon as they complete their merger with a private company, according to the report.
However, SPAC IPOs in which UBS is a subscriber to the business can be launched to customers by UBS’s team of financial advisers, according to the report. UBS served as a primary subscriber for 22 SPACs last year and was a major subscriber to Bill Ackman’s $ 4 billion SPAC, Pershing Square Tontine Holdings.
With a sea of SPACs available to invest, investors have little to do but the management team to decide which one to buy. And recent SPACs from sports celebrities like Alex Rodriguez and Colin Kaepernick are not expected to offer guarantees to investors, according to a recent notice from the Securities and Exchange Commission.