Singapore Exchange to roll out easier rules for Spac listings: Sources

Finalised Spac rules would make SGX the first major Asian bourse to roll out a framework for such blank cheque companies.
Finalised Spac rules would make SGX the first major Asian bourse to roll out a framework for such blank cheque companies.PHOTO: ST FILE

SINGAPORE (REUTERS) - Singapore Exchange (SGX) is in advanced stages on unveiling new guidelines that will make it easier for special purpose acquisition companies (Spacs) to list in the city state after receiving market feedback that some proposals were too strict, four sources familiar with the matter told Reuters on Wednesday (Sept 1).

SGX's regulatory arm is considering easing a minimum $300 million market value proposal for Spacs and a proposal that warrants cannot be detached from underlying shares, said two of the sources who declined to be identified as they were not authorised to speak about the matter.

The moves by SGX come as the bourse has struggled to capture large listings of high-growth companies and faces prospects of losing out in courting South-east Asian start-ups 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," a SGX spokesman said in an e-mail to Reuters.

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 that public, offering it shorter listing timeframes and strong valuations.

Finalised Spac rules would make SGX the first major Asian bourse to roll out a framework for such blank cheque companies.

In other markets, Britain eased rules for such vehicles in July. But they are peaking in popularity in the US 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.

All the sources Reuters spoke to said that SGX was likely to introduce other measures to safeguard investor interests but would simplify proposed guidelines to still make it attractive for Spacs.