The U.S. Securities and Exchange Commission on Wednesday proposed new rules that it says would better protect investors in blank check companies known as SPACs.

Why it matters: SPACs last year raised around $160 billion via IPOs, an all-time record, using proceeds to take dozens of private companies public. Many of those deals are currently underwater.

The biggest change would be removing "safe harbor" protections that allow companies being bought by SPACs to provide more forward-looking projections than are allowed for traditional IPO issuers.

• This uneven playing field helps explain why so many pre-commercial tech companies, including electric vehicle and spaceship makers, have utilized SPACs.
• Congress also has considered legislation to address this discrepancy, but has yet to pass any.

Process: SEC commissioners voted 3-1 in favor of the proposal, with dissenter Hester Peirce saying she believes the new rules would "stop SPACs in their tracks."

• The proposal is now subject to a public comment period, prior to finalization.
• Some SPAC sponsors may argue that the changes will increase costs.

The bottom line: The SPAC surge has slowed, but they're still are plenty of new SPACs being formed and mergers being signed.