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Singapore Exchange may Relax Guidelines for SPAC Listings

Singapore Exchange, a major stock market in Asia, is readying a launch of simplified regulations for listings of special purpose acquisition companies (SPACs), according to a Wednesday (Sept. 1) report from Reuters.

If the effort moves to fruition, it would be the first large Asian stock exchange to accept this type of investment, according to the report.

The multi-asset exchange provides listing, trading, clearing settlement, depository and data services for approximately 40% of listed companies and more than 80% of listed bonds originating outside of Singapore, according to its website. Singapore Exchange regulators are contemplating relaxing a minimum $223.2 million market value proposal for SPACs and an option providing that stock warrants cannot be separated from underlying shares, according to the report.

This is not the first time Singapore Exchange eyed SPACs. As PYMNTS reported in March, the exchange was analyzing whether to begin incorporating SPACs into the mix. While a popular method for taking companies public, SPACs are not permitted on Asian exchanges. An SPAC has no commercial operations and is formed solely to raise cash and search for existing companies to acquire.

Read more: Singapore Exchange Eyes SPACs

Typically, with the formation of a SPAC, investors fund the shell company, which then merges with a privately held company. Usually, the SPAC takes on the acquired company’s name and continues operating as a publicly held company. In 2020, the use of SPACs soared and was buoyed in the first quarter of 2021 when SPACs netted more than the $83.4 billion total of 2020, according to PYMNTS.

Related: SPACs, Or Blank-Check Companies, Raise Record Quarterly Amount

In February, Singapore Exchange CEO Loh Boon Chye had said the exchange had been contemplating allowing so-called blank-check companies to be listed, according to PYMNTS. He said, “If the market is supportive, we hope to be able to do that sometime this year.”

See also: Singapore May List Blank-Check Companies, Or SPACs, This Year

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