By Jing Yang
Singapore will become the first major financial hub in Asia to allow blank-check companies to list.
On Thursday, the Singapore Exchange released new rules for special-purpose acquisition companies to be listed on its main board, concluding a months-long consultation process just as American regulators step up scrutiny of the investment vehicles.
The framework follows a public consultation launched in March. The most marked revision to the draft rules, after considering feedback from investment firms, banks, lawyers, and others, was halving the minimum market capitalization requirement of a SPAC to 150 million Singapore dollars, or the equivalent of about $111.6 million.
"We want the SPAC process to result in good target companies listed on SGX, providing investors with more choice and opportunities."
-Tan Boon Gin, chief executive of the exchange's regulatory arm, said in a statement.
The revised market-cap threshold is more in line with that in the U.S., where the floor for listing on boards run by the Nasdaq Stock Market and the New York Stock Exchange ranges from $50 million to $100 million.
The threshold strikes a balance between attracting high-quality sponsors and ensuring the businesses to be merged with the SPACs remain sizable, the SGX said. In a SPAC, a sponsor refers to the management team of the shell company that is given the task of finding another company, also known as a target, to merge with.
SPACs are shell companies that first raise money from public investors and list on stock exchanges, then hunt for private companies to merge with. They have been touted as a more streamlined alternative to initial public offerings and for a time, they took Wall Street by storm. However, since April, a more critical attitude from the Securities and Exchange Commission has put new issuances on ice.
Write to Jing Yang at Jing.Yang@wsj.com
(END) Dow Jones Newswires
September 02, 2021 05:30 ET (09:30 GMT)
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