Analysis

SPACs to begin listing on the Singapore Exchange

, Mint

Singapore Exchange Ltd. has introduced a framework for SPACs to list in the city-state, the first Asian financial hub to host the vehicles whose popularity in global financial markets has surged over the past year.

SPACs, will be allowed to list in Singapore starting Friday under a more liberal rulebook than initially envisioned by the exchange. The entities require a minimum market capitalization of S$150 million ($112 million), half of the amount SGX proposed earlier, while certain limits on warrants and share redemption have been removed, a statement from the bourse showed Thursday.

Beating Hong Kong to the punch, Singapore’s approval comes as global financial regulators are stepping up scrutiny of SPACs, while firms worldwide have raised a total of $130 billion this year via SPACs.

The introduction of the rules positions SGX “as a regional first-mover in serving Asia’s fast-growing new tech and new economy companies’ financing needs," a spokesperson for the Monetary Authority of Singapore said in a statement.

The pool of Asia-based target firms for SPACs, which sell shares to raise money and explore takeovers, is mainly in the S$500 million to S$1 billion range -- making a S$150 million threshold more market-friendly. Under the new rules too, warrants will now be detachable from shares while investors who vote in favor of a business combination will be allowed to redeem shares.

Here are some of the rules at a glance:

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