FINRA provided guidance to investors considering investments in special purpose acquisition companies (“SPACs”), which typically consist of a purchase of “units” that are comprised of shares and warrants. FINRA cautioned that the terms of the warrants of different SPACs vary significantly.

FINRA made the following suggestions to investors to help them understand the warrant redemption process:

• Research the terms of a warrant’s redemption, considering that warrants may be of substantial value.
• Find out the timeframe for exercising a warrant after an issuer announces an intention to redeem.
• Check whether brokerage firms will advise investors of upcoming warrant redemptions.
• Look out for warrant redemption announcements through the use of (i) an investor’s financial professional, such as a brokerage firm, if it provides warrant redemption notifications, (ii) the issuer’s or acquiree’s website or social media, (iii) the SEC’s EDGAR database, (iv) FINRA’s Over-the-Counter Equities website and (v) other financial news and social media sources.
• Closely read available prospectuses and disclosures.