Hong Kong Contemplating Whether to Allow SPAC Listings

Companies getting listed in the U.S stock markets through merger with Special Purpose Acquisition Companies (SPACs) is becoming common as some private companies seems to prefer this method rather than the traditional method of holding an initial public offering.

Hong Kong Stock Exchange is contemplating about allowing companies to get listed via merger with SPACs which are also known as blank check companies. This was announced by the government which is optimistic that the new United Sates trend will soon become a global trend.

Citing data from Dealogic, in the first two months of the year SPACs have raised $60 billion in merger deals with private companies which go public through them. This amount is around 70% of what SPACs raised last year in U.S stock markets.

According to the government statement issued on March 1, Hong Kong market regulators Securities and Futures Commission (SFC) and Hong Kong Exchanges and Clearing (HKEX) held a meeting with top financial leaders in the city concerning the SPACs issue.

Hong Kong’s Financial Secretary Paul Chan who is also the chairman of The Financial Leaders Forum, asked the two regulators to look in suitable listing mechanisms to enhance the competitiveness of Hong Kong as an international financial center.

Chan also urged the regulators to safeguard the interest of investors while exploring the various listing mechanisms.

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