Funding

SGX to Allow SPAC Listings From Today, Halves Minimum Market Cap to S$150 Million

The Singapore Exchange (SGX) has eased up on some measures that were deemed restrictive with a new framework to enable special purpose acquisition companies (SPACs) to list in the country from today onwards. This move makes SGX the first Asian bourse to offer SPAC listings given the recent frenzy.

In March 2021, SGX had released its initial framework and requested for market feedback where over 80 respondents shared their views.

According to its latest framework, SGX requires that a SPAC listing must have a minimum market capitalisation of S$150 million, which is half of what was proposed initially.

SGX said that it will will work with the Securities Investors Association (Singapore) to increase retail investors’ understanding of SPACs through collaborative efforts including the conduct of educational programmes.

The exchange will also separately partner Singapore Institute of Directors to educate future directors of SPACs on the responsibilities and duties expected of them.

A SPAC is a publicly traded corporation with a two-year life span formed with the sole purpose of effecting a merger, or “combination,” with a privately held business to enable it to go public.

Also known as blank check companies, SPACs offer an alternative to traditional initial public offerings (IPO).

Tan Boon Gin

“SGX’s SPAC framework will give companies an alternative capital fund raising route with greater certainty on price and execution. We want the SPAC process to result in good target companies listed on SGX, providing investors with more choice and opportunities.

To achieve this, you can expect us to focus on the sponsors’ quality and track record. We have also introduced requirements that increase sponsors’ skin in the game and their alignment with shareholders’ interest,”

said Tan Boon Gin, CEO of Singapore Exchange Regulation (SGX RegCo).

SGX’s new rules can be found here.