Singapore Exchange releases regulatory framework for SPAC listings

The Singapore Exchange (SGX) has rolled out a market-friendly regulatory framework to enable special purpose acquisition companies (SPACs) to list in the city-state, effective from September 3.

The relaxed rules, compared with the original proposal, will provide companies with “an alternative capital fundraising route with greater certainty on price and execution”, said Tan Boon Gin, chief executive of Singapore Exchange Regulation. “We want the SPAC process to result in good target companies listed on SGX, providing investors with more choice and opportunities.”

The exchange will focus on sponsors’ track records in an attempt to attract suitable companies to list on the SGX mainboard. Such a vehicle could boost fundraising activities in public equity markets given the vibrant state of the local private funds sector, a spokesperson at the Monetary Authority of Singapore said.


The SGX has set the minimum market capitalisation requirement for a SPAC IPO at $112 million (S$150 million), reduced by half from the initial proposal. The de-SPACing process must take place within 24 months, with an extension of up to 12 months, subject to fulfilment of prescribed conditions, the exchange said.

“De-SPACing can proceed if more than 50% of independent directors approve the transaction and more than 50% of shareholders vote in support of the transaction,” it said.

De-SPACing is the last step in a five-stage process that enables a target company eventually to attain the public company status of the SPAC. The first step is the initial formation; the second is the IPO; the third is the search for a target firm; the fourth is a shareholder merger vote; and the final stage is either the close of an acquisition or the return of the SPAC’s proceeds to investors. Sponsors must subscribe to at least 2.5% to 3.5% of the IPO shares or units or warrants, depending on the market capitalisation of the SPAC, the SGX said.

Warrants issued to shareholders will now be detachable, and maximum percentage dilution to shareholders arising from the conversion of warrants issued at IPO is capped at 50%, it said. All independent shareholders will be entitled to redemption rights.

SPAC listings are increasingly popular among Singaporean companies or led by Singaporeans as more and more Southeast Asia private companies are looking for capitals. The phenomenon originally surged last year in the United States, triggered by worldwide liquidity concerns following the fallout from the pandemic.

A SPAC is a newly formed public company without current operations that uses a combination of initial public offering (IPO) proceeds and additional financing — such as via private investment in public equity — to fund the acquisition of a private operating firm, subsequently, to take that private company public.


The newly enacted framework followed a public consultation held by the exchange, which ran from March 31 to April 28. The consultation aimed to help the exchange gain a better understanding of whether the city-state should establish a regulatory regime to support SPAC listings in Singapore. More than 80 respondents — including financial companies, investment banks, private equity and venture capital funds, lawyers and auditors — provided feedback to the SGX.

The SGX will work with the Securities Investors Association (Singapore) to increase retail investors’ understanding of SPACs through a series of educational programmes. It will also partner separately with the Singapore Institute of Directors to educate future directors of SPACs on the duties and responsibilities expected of them, it said.

Written by: Zeng Yixiang, Regulatory Intelligence Correspondent for Southeast Asia, Thomson Reuters

Subscribe to Business Insight

Discover best practice and keep up-to-date with insights on the latest industry trends.