The financial watchdog is consulting on a raft of changes to UK SPAC listings, including the rules around SPAC trading suspension when the vehicle identifies an acquisition target.
Following a surge of SPAC or “blank check” company listings on Wall Street and more recently in Europe, London is keen not to be left behind.
The Financial Conduct Authority (FCA) said it was proposing a waiver on the current rule that trading in a listed SPAC should be suspended at the point where it identifies a company to acquire.
The current rules exist to preserve market integrity during a period when limited information on a prospective deal could result in chaotic trading, the FCA said.
However, the suspension of the SPAC means retail investors are locked into the investment at the point a target is announced, potentially months before a completion.
FCA director of market oversight Clare Cole said: “We are consulting on a set of clear conditions based on which we will not look to suspend the listing of a SPAC.
“These changes should encourage issuers that are willing to provide transparency and strong protections to investors. This should support market confidence and aligns our approach more closely with standards in other international markets.”
Special acquisition companies – Spacs – have risen to prominence during the pandemic in the US and in parts of Europe.
Also known as blank cheque vehicles, Spacs raise capital through a public listing with the purpose of acquiring an existing company. They’re often considered an alternative to an IPO and offer private companies a faster and more predictable way to go public.
There is now investor interest in SPACs in London following Lord Hill’s review into listing rules.