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03 Mar 2021  (402 Views) 
Monetary Auth of Singapore

Should Singapore allow SPACs to list in SGX?
Hong Kong is now considering to allow SPAC (special purpose acquisition company) to list in the HK exchange.

Hong Kong is exploring whether to allow Special Purpose Acquisition Companies (SPAC) to list in the Asian financial hub, according to a government statement, indicating that a largely US phenomenon could be going global. 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. 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 per cent of 2020's annual deal value.

TKL comments - I expect that the Singapore Exchange SGX and MAS will also study this trend.

I suggest a different approach.

The interest in SPAC is a reflection of outdated listing practices in exchanges that increases cost and complexity of ordinary IPO.

Instead of allowing SPACS to get around the tiresome regulations, the exchanges should consider updating the listing requirements.

Tan Kin Lian

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