Singapore Exchange to Issue Easier Rules for SPAC Listings

Singapore Exchange is preparing to roll out easier guidelines for listings of special purpose acquisition companies (SPACs) in the city-state, which would make it the first major Asian bourse to accept such investment vehicles, Reuters reported. The changes come after SGX, which has struggled to capture large listings of high-growth companies, received market feedback that some of its earlier proposals were too strict. SGX's regulatory arm is now considering easing a minimum S$300 million ($223.2 million) market value proposal for SPACs and a proposal that warrants cannot be detached from underlying shares. SGX faces prospects of losing out in courting Southeast Asian startups looking to list in their home markets or in the United States. Though SGX will have an early mover advantage, one lawyer said that it would still be challenging for it to become a vibrant platform for SPACs. "Whether SPACs will take pride of place in the Singapore market, like real estate investment trusts, will depend on whether there is a perceptible track record of good valuations and liquidity post-SPAC mergers," said Robson Lee, a partner at Gibson, Dunn & Crutcher LLP. In a consultation paper for SPAC listings issued in late March, SGX had outlined measures to rein in risks seen in U.S. SPACs such as excessive dilution by shareholders and sponsors and a rush by these firms to merge with targets. Read more.