Starting Friday (September 3), the Singapore Stock Exchange (SGX) will allow companies to list Singapore through a special purpose procurement (SPAC) framework.
The guidelines are under a more liberal rulebook than initially proposed by the exchange. On the one hand, a minimum market capitalization of A $ 150 million (US $ 112 million), half of the amount previously proposed by SGX, according to a statement of SGX Thursday. Certain stock and redemption limits have also been removed.
SPACs, also known as “blank check companies,” have existed since the 1990s. They have recently gained popularity due to the favorable framework that benefits many companies and investors, such as a faster timetable for making fundraising public.
SPACs raise money from investors and then seek to acquire another business, usually private, within a designated period of time.
Loh Boon Chye, CEO of SGX, had it before set the goal for the exchange to list its first SPAC this year.
Competitive SPAC market
SGX is the latest in a series of global financial markets that have opened up to SPAC quotes over the past year. Popular SPAC markets are in the United States, including the NASDAQ.
Relaxed rules come after market comments. The exchange had proposed stricter restrictions than the United States, as it wanted to increase guarantees to protect investors while increasing the local stock market.
The move puts Singapore one step ahead of Asian rival Hong Kong. This year, companies around the world have raised a total of US $ 130 trillion through SPAC, according to Bloomberg data.
Attract local tech companies to the list here
For years, Singapore has struggled to attract high-profile tech players to IPOs. Popular Southeast Asian technology companies such as Sea Ltd and gaming hardware manufacturer Razer have opted for listings anywhere other than their home country.
Recently, it has also announced the country’s technological unicorn Grab is scheduled to be made public through a SPAC agreement on the US Nasdaq, as has already been done PropertyGuru and supposedly Carousel in overseas bags.
The latest move could show more list of local-based technology unicorns in Singapore.
The SPAC offering can provide SGX with the visibility needed to attract companies that are ready to trade, amid a competitive global public market.
Last year, more than 165 global SPAC companies were listed, five times more than in 2015.
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