City regulator proposes easing suspension rule for listed SPACs
London is keen not to be left out of the booming SPAC market.
The financial watchdog is consulting on a raft of changes to UK SPAC listings, including the rules around SPAC trading suspension when the vehicle identifies an acquisition target.
Following a surge of SPAC or “blank check” company listings on Wall Street and more recently in Europe, London is keen not to be left behind.
The Financial Conduct Authority (FCA) said it was proposing a waiver on the current rule that trading in a listed SPAC should be suspended at the point where it identifies a company to acquire.
United KingdomBritain proposes easing listed SPAC suspension rule
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The London Stock Exchange Group offices are seen in the City of London, Britain, December 29, 2017. REUTERS/Toby Melville
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Britain s financial watchdog on Friday proposed changing how special purpose acquisition companies (SPACs) can list as the City of London seeks to bolster its global attraction after Brexit.
After a surge in what are dubbed blank check companies on Wall Street and more recently in Europe, Britain is keen that London is not left behind.
SPACs list on an exchange and must use the proceeds to buy an existing company within a set timeframe.
James Langton
In an effort to make special purpose acquisition company (SPAC) listings more attractive, the U.K.’s Financial Conduct Authority (FCA) is proposing changes to its listing rules.
The FCA launched a consultation on April 30, on proposed rule changes that are designed to make SPACs more appealing to investors by allowing them to keep trading, provided that they carry certain added investor protections.
Currently, under U.K. rules, a SPAC is automatically cease traded when it identifies an acquisition target. While this practice is intended to prevent disorderly trading, it also means that investors are locked in, possibly for months, until a transaction is completed.
Watchdog weighs SPAC rule-changes to ramp up London listings
Bloomberg
A view of London s financial district
The U.K. s markets regulator has laid out proposed changes to its listing rules for special purpose acquisition companies as London looks to grab a greater share of the booming market.
Those blank-check firms that raise at least £200 million ($277 million) and include an option for redemption may no longer be subject to suspended trading when the vehicle identifies an acquisition target, the Financial Conduct Authority said in a statement Friday. U.K. markets have been stymied by rules requiring the cash shells to pause trading in such an event to shield investors from price jolts while a deal is being completed.
Financial Conduct Authority
FCA consults on strengthening investor protections in SPACs
The FCA has launched a consultation on proposed changes to its Listing Rules for certain special purpose acquisition companies (SPACs).
In CP21/10, the FCA proposes amending rules to allow an alternative approach for listed SPACs that are able to demonstrate the higher levels of investor protection that have developed in certain overseas jurisdictions.
Currently a SPAC listing is typically suspended at the point it identifies an acquisition target. Suspension seeks to preserve market integrity during a period when limited information on a prospective deal could result in disorderly trading in a SPAC’s shares. However, suspension results in investors being locked into a SPAC at the point a target is announced, potentially for many months prior to completion, which is undesirable for investors and issuers. The FCA are proposing that SPACs that comply with higher levels of investor p