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Hong Kong proposes SPAC listings, restricts to professional investors
- Blank-cheque companies must raise at least US$128 million to list on the Hong Kong stock exchange’s main board
- Retail investors will only be able to buy after a de-SPAC transaction
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Hong Kong will only allow large blank-cheque companies that raise at least HK$1 billion (US$128 million) to list on its main board and ban retail investors from buying these so-called special purpose acquisition companies (SPACs), according to proposed rule changes by Hong Kong Exchanges and Clearing (HKEX).
In a consultation paper issued on Friday, the bourse operator proposed a range of tough criteria for SPACs listings, including requiring target companies to meet its normal listing requirements to go public. The consultation period is set to run 45 days.
“We want to provide an alternative listing method for issuers instead of replacing the current regime,” Bonnie Chan, the HKEX’s head of listings, said in a media telephone call on Friday. “We do not believe SPACs will replace the traditional way of listing. In the US, there have been a lot of SPAC listings, but there are still a lot of companies listing in the traditional channel.”
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The proposals, if they move forward, will mean Hong Kong is the latest major market in Asia to allow blank-cheque firms to go public. Singapore adopted new rules this month allowing SPACs to list in the city state.
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SPACs: Everything you need to know about the finance world’s new big thing
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SPACs have been one of the hottest fundraising trends since the beginning of 2020, raising nearly US$126 billion this year alone, according to SPAC Analytics, a research firm focused on these investment vehicles.
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