How does Singapore plan to rewrite the rule book for SPACs in Asia?
- Decision on whether to allow listings of blank-cheque companies will follow market consultation ending April 28
- Hong Kong’s stock exchange also considering rule changes to allow SPACs to list
Singapore unveiled its plans on Wednesday to allow special purpose acquisition companies (SPACS) to raise money in the city state as it seeks to be the go-to-market in Asia for one of the planet’s hottest fundraising trends.
The so-called blank check companies have proven extremely popular in the United States. Still, they have not taken off in Asia following a series of high-profile collapses in Malaysia and South Korea, as well as lingering regulatory concerns about the structure of the investment vehicles.
However, the frantic pace of deal-making surrounding SPACs since early last year has bourses from Hong Kong to Indonesia racing to rewrite their rules.
“The feedback [from market professionals] is that an Asian SPAC would be of interest to investors and sponsors because it would be in the same time zone as Asian targets,” Tan Boon Gin, CEO of Singapore Exchange Regulation (SGX RegCo), said in a media briefing. SGX RegCo is a unit of the city’s bourse operator.
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Under the proposed rule changes, SPACs would be required to have a minimum market capitalisation of S$300 million (US$223 million) and would only be able to list on the Singapore Exchange’s (SGX) mainboard. That would be a higher minimum threshold than SPAC listings on the New York Stock Exchange or Nasdaq.