Press Releases in Hong Kong

HK to launch consultation on SPAC listings in third quarter

In this Aug 19, 2020 file photo, people wearing protective masks walk past signage for Hong Kong Exchanges & Clearing Ltd (HKEX) displayed at the Exchange Square complex in Hong Kong, China. (ROY LIU / BLOOMBERG)

HONG KONG – Hong Kong Exchanges and Clearing Ltd will launch a consultation on rule changes in the third quarter of this year to allow special purpose acquisition companies (SPACs) to list in the city, a summary of a meeting of the city’s top finance officials published on Friday showed.

During the Financial Leaders Forum chaired by Financial Secretary Paul Chan Mo-po, members were also briefed by the Financial Services and the Treasury Bureau and financial regulators on the legislative proposals of introducing a fund re-domiciliation mechanism in Hong Kong.

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Allowing SPACs would further add momentum for the Hong Kong exchange, which last year had the busiest IPO year in a decade, boosted by the listing of a string of high-profile Chinese mainland technology companies

They agreed that the proposals would help attract investment funds to set foot in Hong Kong, entrenching the city’s position as an international asset and wealth management center.

A SPAC is a blank-cheque company that raises money through an initial public offering (IPO) with the intention of merging with another firm, allowing that business to list more quickly.

Rival Singapore Exchange launched a consultation on allowing SPACs earlier this year.

Most SPACs so far have listed in the United States. They raised US$60 billion in the first two months of 2021, Dealogic data showed, already more than 70 percent of 2020’s annual deal value.

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Allowing SPACs is expected to further add momentum for the Hong Kong exchange, which last year had the busiest IPO year in a decade, boosted by the listing of a string of high-profile Chinese mainland technology companies.

With Reuters inputs