New rules for special-purpose acquisition companies proposed Wednesday by the Securities and Exchange Commission would increase the amount of information that SPACs must disclose and eliminate a feature of the companies that has allowed them “to issue overly optimistic earnings projections,” Reuters reported.

“Companies raising money from the public should provide full and fair disclosure at the time investors are making their crucial decisions to invest," SEC Chair Gary Gensler said, according to Reuters.

Details about compensation, who is sponsoring the SPAC, conflicts of interest and the transaction that is the ultimate target of the SPAC would be required under the new proposed rules.

Gensler told MarketWatch that the new rules would “strengthen disclosure, marketing standards, and gatekeeper and issuer obligations by market participants in SPACs, helping ensure that investors in these vehicles get protections similar to those when investing in traditional initial public offerings.”

The proposed rules could also clarify that investors can sue SPACs if the forecasts they provide about the companies they target to take public are inflated or otherwise inaccurate, MarketWatch said. Gensler and SEC staff began to take a closer look in April 2021 at ways to ensure investors were “protected” in these transactions, The Wall Street Journal reported at the time.

If the proposed rules are enacted as written, they would also apply to existing SPACs that haven’t yet completed a merger, SEC officials told the WSJ.

SPACs have garnered close attention from the SEC over the past two years. There was a boom for the so-called blank-check companies, which raise money to buy target companies by listing units of stock on public stock exchanges. Private investors gave SPACs hundreds of billions’ worth of capital between the middle of 2020 and the middle of 2021, Bisnow has reported. The frenzy seemed to be quieting late last year, and whether these rules will further quiet the market for SPACs remains to be seen.

Meanwhile, the bloom is already off the rose for many SPACs. Many investors looking for SPACs to place money in will come away disappointed, and many SPACs that have completed a merger and listed a company are trading well below expectations. The most notorious is WeWork, which opened at the standard $10 per share and is trading at $6.86 on Wednesday. Smart glass manufacturer View is in even more dire straits — it is trading just over $2 and is at risk of being delisted by Nasdaq.