In this Aug 19, 2020 file photo, people wearing protective masks walk past signage for Hong Kong Exchanges and Clearing Ltd (HKEX) displayed at the Exchange Square complex in Hong Kong, China. (ROY LIU / BLOOMBERG)
HONG KONG – A new listing regime for special purpose acquisition companies (SPACs), also called blank check companies, will come into force in January 2022.
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A SPAC is a type of shell company through which funds are raised by listing to acquire a business (a De-SPAC target) at a later stage (a De-SPAC transaction) within a pre-determined time after its listing.
The decision announced Friday by the stock exchange of Hong Kong follows consultations held in September. Some of the proposals the bourse made have been adjusted in response to views gathered. The proposal to require a minimum of 30 institutional professional investors has been revised down to 20.
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SPACs that plan to list are also being required to raise at least HK$1 billion ($128 million).
Chief Executive Carrie Lam Cheng Yuet-ngor supported SPAC listings in her Policy Address in October.
HKEX Chief Executive Officer, Nicolas Aguzin, said in a statement that by “enabling experienced and reputable SPAC promoters to source listings from new and innovative industries, we look to help fuel the growth of the companies of tomorrow.’’ SPAC promoters are also called sponsors” in the United States.