IPO

Asian SPAC listings face stern test as regulators consider rule changes

Asian bourses from Tokyo to Singapore are considering rule changes to allow listing of SPACs, but some industry players say the region may not attract the kind of frenzy, or the massive billions of dollars, seen in the U.S. for such blank cheque firms.

The trend to list through Special Purpose Acquisition Companies (SPACs) has seen such floats raise $96 billion in the United States this year after a bumper 2020.

In Asia, industry executives worry that low valuations in some markets and the need for SPAC regimes to include strong investor protection safeguards would keep such listings from rapidly taking off.

Earlier this year, Singapore Exchange’s regulatory unit said it was exploring a consultation on SPACs, while the Hong Kong government directed the city’s exchange and regulator to look into allowing such listings.

Indonesia’s bourse has also said it would consider allowing SPACs, and in Japan, a government panel said SPACs listings should be considered to boost growth.

One problem for SPACs in Hong Kong are recent rule changes brought in to resolve long standing worries about illegal practices linked to the formation and trading of shell companies.

The important thing will be to ensure that our rules are, as far as possible, aligned with U.S. listing rules for SPACs so that Singapore can be seen as the Asian alternative bourse.

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