On December 17, 2021, the Stock Exchange of Hong Kong Limited (the Exchange) announced new listing regime for special purpose acquisition companies (SPAC). These new rules will take effect on January 1, 2022. This regulatory update reflects the Exchange’s commitment to remain an attractive, competitive and diversified capital-raising market in the region.
Previously on September 17, 2021, the Exchange published consultation papers (link: https://www.hkex.com.hk/News/Regulatory-Announcements/2021/210917news?sc_lang=en) on proposed rules on SPAC to solicit feedback from stakeholders.
The Exchange’s announcement on December 17, 2021 (link: https://www.hkex.com.hk/News/Regulatory-Announcements/2021/211217news?sc_lang=en) include:
(1) a summary of the key differences between the proposals set out in the Exchange’s consultation paper dated September 17, 2021 and the requirements to be implemented:
(2) a link (link: https://www.hkex.com.hk/-/media/HKEX-Market/News/Market-Consultations/2016-Present/September-2021-Special-Purpose-Acquisition-Co/Conclusions-(Dec-2021)/cp202109cc.pdf?la=en) to a 154-page report on the conclusions reached with respect to the aforesaid consultation papers. Appendix IV of the report sets forth the actual new rules of this new regime for SPAC, and Appendix V of the report is a guidance letter on SPAC. Both the new rules and the guidance letter will become effective on January 1, 2022.
The new rules define a SPAC as an issuer that has no operating business and is established for the sole purpose of conducting a transaction in respect of an acquisition of, or a business combination with, a target (a De-SPAC Transaction), within a pre-defined time period, to achieve the listing of the target.
We have listed below a few rules of the new regime for the sole purpose of giving you a quick overview.
Formation
- A SPAC Promoter is a person who establishes a SPAC and/or beneficially owns Promoter Shares issued by a SPAC.
- All…
