Analysis

SPACs set to list in Hong Kong from January 2022

, Borneo Bulletin

SPACs can list in Hong Kong from January 1, the stock exchange operator said on Friday, the latest global bourse to tap demand for the investment vehicles although interest in them has waned from earlier this year.

Market participants said Hong Kong hoped to attract investors from mainland China to list SPACs that raise cash to buy private firms and take them public without a traditional initial public offering. The move to open up to SPACs follows scrutiny from both Chinese and the United States (US) regulators that caused a sharp slowdown in Chinese listings in the US.

Friday’s statement from Hong Kong Exchanges and Clearing also set out adjustments to proposals for a SPAC regime that had been published in a consultation document this year, relaxing some of those initial rules.

Tweaks included saying a SPAC’s securities must be distributed to a minimum of 20 institutional professional investors not 30 and adjusting rules that had restricted the circumstances in which investors could redeem shares in a SPAC.

Some investment banks and corporate advisers had said the initial regime proposals were too onerous and would make Hong Kong uncompetitive, although the adjusted rules remain stricter than those in the US.

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