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On 30 April 2021, the UK Financial Conduct Authority (FCA) published a consultation paper proposing changes to the Listing Rules applicable to special purpose acquisition companies (SPACs).
The proposed changes to the Listing Rules follow the UK Listing Review carried out by Lord Hill, and the recommendations of that review that were published on 3 March 2021. Lord Hill’s review noted that the London Stock Exchange (LSE) and London’s capital markets were at a disadvantage, and losing ground, to European rivals such as Euronext Amsterdam in the race to be Europe’s premier location for the flood of SPAC listings that occurred in 2020 and seem on track to continue in 2021. The imperative for quick action in altering the rules is perhaps best evidenced by the FCA consulting only for the minimum permitted period of four weeks, ending on 28 May 2021. As such, the new rules are expected to come into effect shortly after th
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The FCA has published its anticipated consultation paper on its proposed changes to the Listing Rules in relation to special purpose acquisition companies (SPACs). The proposals set out the framework for a more flexible regime for larger SPACs that provide strong investor protections. Subject to the consultation process, the FCA aims to introduce the proposed changes by the summer.
Background
Currently under the Listing Rules there is a rebuttable presumption that a SPAC will be suspended from listing when it announces its target acquisition. The basis for this presumption is that there will generally be insufficient publicly available information about the proposed transaction and the SPAC will be unable to assess accurately its financial position and inform the market accordingly. A consequence is that while a SPAC is suspended, investors in the SPAC are unable to realise their investment.
City Corporation calls on policymakers to help UK compete with US for tech listings What is city talk?
The City of London Corporation has today (7 May) published a new research report calling on policymakers to take vital steps to improve the UK’s attractiveness as a destination for new listings.
London’s Equity Capital Markets Ecosystem finds that the UK should act to address the current disparity which exists with competitors, notably the US which currently accounts for more than half (53%) of fintech IPO listings.
The UK Listing Review, chaired by Lord Hill and launched by the Chancellor in November 2020, set out a number of recommendations in order to attract new listings.
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The Financial Conduct Authority (FCA) has launched a consultation on proposed changes to its Listing Rules for certain special purpose acquisition companies (SPACs). The proposed changes to the rules around SPACs were outlined in the UK Listing Review, led by Lord Hill on 3 March 2021.
SPACs are cash shell companies formed by sponsors that raise funds through an IPO with a view to making one or more acquisitions, with the subsequent acquisition of a target company being referred to as the “deSPAC” transaction.
Existing rules
There is a presumption in the Listing Rules that trading in the SPAC will be suspended when it announces an intended acquisition or details of the potential transaction have leaked. The current rules seek to preserve market integrity by suspending the listing and therefore avoiding disorderly markets as a result of incomplete information about the proposed transaction being available at that sta
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Key proposed changes to the UK listing regime include the removal of the presumption of suspension in trading in a SPAC’s shares when it announces a potential acquisition, subject to certain qualifying criteria being met.
The UK Financial Conduct Authority (FCA) opened its
consultation on proposed changes to the UK Listing Rules for certain special purpose acquisition companies (SPACs) on April 30, 2021. The consultation launch follows the publication on March 3, 2021, of the
results of the UK government’s UK Listing Review, chaired by Lord Jonathan Hill, which recommended changes to the listing regime to increase the attractiveness of UK listings for SPACs while developing market and investor safeguards.