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Singapore Exchange Seen Rolling Out Easier Rules for SPAC Listings

Singapore Exchange’s regulatory arm is considering easing a minimum S$300 million ($223.2 million) market value requirement for SPACs and another that warrants cannot be detached from underlying shares, said two sources

A man wearing a face mask walks past the Singapore Exchange (SGX) amid measures the curb coronavirus in Singapore's central business district in April 2020. Photo: Reuters, Edgar Su.

Singapore Exchange is in the advanced stages of unveiling new guidelines that will make it easier for special purpose acquisition companies (SPACs) to list in the city-state, said four sources familiar with the matter.

Singapore Exchange‘s regulatory arm is considering easing a minimum S$300 million ($223.2 million) market value requirement for SPACs and another that warrants cannot be detached from underlying shares, said two of the sources, who declined to be identified because they were not authorised to speak about the matter. The easier guidelines being mulled follow market feedback that some proposals were too strict, said the sources.

Finalised SPAC rules would make SGX the first major Asian bourse to roll out a framework for these so-called blank check companies.

The moves by SGX come as the bourse struggles to attract large listings of high-growth companies and even risks failing to attract Southeast Asian startups looking to list in their home markets or in the United States.

“We are carefully reviewing the feedback and carrying out our engagements with respondents, regulators and other stakeholders,” an SGX spokesperson said in an email.

SGX said that given the high level of interest, it is looking to publish the results of its consultation “as soon as possible.”

SPACs are shell corporations that list on stock exchanges and then merge with an existing company to take it public, offering shorter listing timeframes and potentially higher valuations.

In other markets, Britain eased rules for such vehicles last month. They are peaking in popularity in the United States as regulators there clamp down on SPACs after a listing frenzy.

In a consultation paper for SPAC listings issued in late March, SGX had outlined measures to rein in risks seen in US SPACs such as excessive dilution by shareholders and sponsors and a rush by these firms to merge with targets.

The sources said that SGX was likely to introduce other measures to safeguard investor interests but would simplify proposed guidelines so it is attractive for SPACs to list in Singapore.

• Reuters and Jim Pollard

 

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Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years and has a family in Bangkok.

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