Singapore Exchange Limited has introduced a framework for listing blank-check companies in the city-state, the first Asian financial hub to host vehicles whose popularity in global financial markets has grown over the past year.
Special Purpose Acquisition Companies, or SPACs, will be allowed to list in Singapore from Friday under a more liberal rule book than what was initially envisioned by the exchange. Entities are required to have a minimum market capitalization of S$150 million ($112 million), half the amount previously proposed by SGX, while some limits on warrants and share redemptions have been removed, a statement showed on Thursday. .
Singapore’s approval comes as global financial regulators are stepping up SPAC’s investigation, beating Hong Kong. While firms around the world have raised a total of $130 billion this year through SPAC — according to data compiled by Bloomberg — the pace of listings has sparked more recent months with the U.S. Securities and Exchange Commission calling for more disclosures. Only earning bust is valid. Some concerns over structures.
A spokesman for the Monetary Authority of Singapore said in a statement that the introduction of the regulations positions SGX as “a regional first-mover in meeting the financial needs of Asia’s rapidly growing new technology and new economy companies.”
SGX changed its proposed rules for SPAC listings following market reaction. “The market wants features that align sponsor interest with shareholder interest, rather than what we have proposed, which were restricted shareholder rights,” said Tan Boon Jin, CEO of the Singapore Exchange Regulation.
The regulatory arm of the exchange had earlier this year proposed tighter restrictions than in the US as it sought to boost the local IPO market as well as address concerns over investor safety. In an interview in February, SGX CEO Loh Boon Chee said that the exchange is aiming to list its first SPAC this year.
more relaxed rules
While the “honeymoon period” with blank check companies in the US is over, Stephanie Yuen said, “international sponsors may see Singapore as a good neutral exchange to launch their SPACs and attract Asian targets”. , said Stephanie Yuen Theo, joint managing partner at law firm TSMP Law Corp.
The pool of Asia-based target firms for SPAC, which sell shares to raise funds and explore acquisitions, is primarily in the S$500 million to S$1 billion range – making the S$150 million range more market-friendly. makes. Under the new rules also, warrants will now be able to be liquidated from shares, while investors who vote in favor of the business combination will be allowed to redeem the shares.
Meanwhile, market participants expect SPAC to boost Singapore’s IPO business at a time when Southeast Asian companies are looking attractive.
Read: Unseen IPO markets suddenly booming as China slows deals
“Singapore has an ecosystem of companies that have a regional footprint and can choose to list in Singapore; Tech will certainly be a relevant area as SPACs take off,” said Vineet Mishra, co-head of ASEAN investment banking at JP Morgan Chase & Co.
Here are some rules at a glance:
- Sponsors will be required to have a minimum equity participation of 2.5% to 3.5%
- Moratorium Requirements on Sponsor Shares Before and After D-SPAC
- D-SPAC must be within 24 months of the IPO, with an extension of up to 12 months
- Disclosure requirements in D-SPAC are the same as in General Initial Public Offerings.
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