SGX Introduces New SPAC Listing Rules

Singapore Exchange (SGX) announced on Thursday the new rules that enable Special Purpose Acquisition Companies (SPAC) to list on its Mainboard, effective 3 September 2021.

SGX’s SPAC framework is designed to offer companies an alternative capital fund raising route with greater certainty on price and execution.

The Exchange details that an SGX listing under the SPAC framework must have the following key features:

• Minimum market capitalisation of S$150 million;

• De-SPAC must take place within 24 months of IPO with an extension of up to 12 months subject to fulfilment of prescribed conditions;

• Moratorium on Sponsors’ shares from IPO to de-SPAC, a 6-month moratorium after de-SPAC and for applicable resulting issuers, a further 6-month moratorium thereafter on 50% of shareholdings;

• Sponsors must subscribe to at least 2.5% to 3.5% of the IPO shares/units/warrants depending on the market capitalisation of the SPAC;

• De-SPAC can proceed if more than 50% of independent directors approve the transaction and more than 50% of shareholders vote in support of the transaction;

• Warrants issued to shareholders will be detachable and maximum percentage dilution to shareholders arising from the conversion of warrants issued at IPO is capped at 50%;

• All independent shareholders are entitled to redemption rights;

• ​Sponsor’s promote limit of up to 20% of issued shares at IPO.

In addition, SGX will work with the Securities Investors Association (Singapore) to increase retail investors’ understanding of SPACs through collaborative efforts including the conduct of educational programmes. SGX will separately partner Singapore Institute of Directors to educate future directors of SPACs on the responsibilities and duties expected of them.