Hong Kong's tweaked SPAC regime to launch on Jan 1

[HONG KONG] SPACs will be allowed to list in Hong Kong from Jan 1, 2022, the local stock exchange operator said on Friday, becoming the latest global bourse to tap the desire for such investment vehicles even as the frenzy from earlier this year wanes.

The statement from Hong Kong Exchanges and Clearing also set out several adjustments to its initial proposals for a SPAC regime which it published in a consultation document earlier this year.

Some investment banks and corporate advisors had pushed back against the initial proposals rules for blank-cheque listings, arguing they were too onerous and would not make the city competitive.

"The changes should be positive. The exchange has taken consideration of the market and made this regime quite commercial and practical now," one Hong Kong capital markets banker said.

"It won't be like the US but we expect to see decent interest," he added in terms of the prospect of a rush to list SPACs in the city.

Tweaks to the rules included changing the initial proposal that SPAC's securities must be distributed to a minimum of 30 Institutional Professional Investors to 20, and tweaking rules that had placed restrictions on the circumstances in which investors could redeem their shares in a SPAC.

SPACs, or special purpose acquisition companies, are shell corporations that list on stock exchanges and then merge with an existing company to take it public, typically offering strong valuations and shorter listing time frames than initial public offerings.

REUTERS