FCA Makes Consultation on Strengthening Investor Protections in SPACs

The UK regulator Financial Conduct Authority (FCA)​ confirms that it will be consulting shortly on amendments to Listing Rules and related guidance to give more protections for investors in Special Purpose Acquisition Companies (SPACs).

The structural features and enhanced disclosure will be considered, including a minimum market capitalization and a redemption option for investors, required to provide appropriate investor protection.

The regulatory body states that their proposals will help to ensure that SPACs operate within a framework of high regulatory standards and oversight.

Where such protections are in place, it considers that the existing presumption of suspension of the listing for such companies at the point of announcement of an acquisition target is not required any more and it therefore intends to consult on this basis, aligning this element of their rules more closely with other major jurisdictions.

FCA states in the announcement that it plans for the consultation to be open for 4 weeks and will welcome views from the full range of stakeholders. Subject to that process, FCA’s aim is to make the new rules and/or guidance by early summer.