Continental on SPAC Trust Accounts
In light of the recent failure of Silicon Valley Bank and Signature Bank, there have been some inquiries as to where SPAC trusts are held. Continental Stock Transfer & Trust had already confirmed that Silicon Valley Bank was not one of their approved asset managers and therefore none of the SPACs that used Continental as a Trustee would be in danger of having their funds held there. Additionally Continental is the currently the Trustee for 93.8% of all active SPACs.
However, there are still some questions regarding segregation of accounts and the like, so Continental recently put together the following statement.
INFORMATION REGARDING CONTINENTAL’S SPAC TRUST ACCOUNTS:
Please be advised that Continental Stock Transfer & Trust Company maintains hundreds of SPAC trust accounts, all of which are segregated accounts. None of those accounts are held at Silicon Valley Bank or Signature Bank.
With regard to our SPAC trust accounts held at qualified financial institutions, accounts which are invested in treasury bills or Rule 2A-7 compliant money market funds are not part of the financial institution’s capital or balance sheet.
Uninvested deposits or demand deposits are however part of that institution’s capital and balance sheet. In this regard, you should gain comfort from the fact that all of Continental’s SPAC demand deposit accounts and deposit accounts are held only at JP Morgan Chase, Citibank or Morgan Stanley.