Hong Kong may allow listings by SPACs, as local tycoons look overseas to tap deal making frenzy
- Special purpose acquisition companies, or ‘blank-cheque companies’, have raised US$60.2 billion year to date
- Hong Kong has rules to allow cash companies to list but investor protection is a concern
Hong Kong’s financial regulators may open the door for so-called blank-cheque companies to raise funds on the city’s stock market, as local tycoons are being driven offshore to tap a deal making frenzy.
The city’s securities regulator and stock-market operator were studying proposals allowing special purpose acquisition companies (SPACs) to raise capital on the Hong Kong stock exchange, according to a briefing on Monday to the Financial Leaders Forum, which was chaired by Financial Secretary Paul Chan Mo-po.
The Securities and Futures Commission (SFC) and Hong Kong Exchanges and Clearing (HKEX) have been instructed to explore suitable listing regimes to enhance the competitiveness of Hong Kong as an international financial centre while safeguarding the interests of the investing public, according to a government statement.
“The government has required the stock exchange and the regulator to study promoting SPACs to list in Hong Kong, in a bid to add in new fundraising channels, while at the same time to offer sufficient investor protection measures,” Chan said in a Bloomberg TV interview on Tuesday.
A growing number of Asian funds, not least those led by the scions of two of Hong Kong’s wealthiest families, are looking at listing their SPACs in Singapore and elsewhere.