The UK Financial Conduct Authority (FCA) has reviewed the rules applied to SPACs (special purpose acquisition companies). The goal has been to eliminate some of the most significant obstacles in force for its establishment in order to attract these investment vehicles to the London market.
The changes proposed by the British financial supervisor seek eliminate the presumption of suspension of trading of the SPACs when identifying an investment objective if they meet certain information criteria, a measure that is now being considered to be recovered in the US to avoid issues of market abuse and information inequality among shareholders.
“There is currently a general presumption that we will suspend the listing of a SPAC when it identifies a possible acquisition objective. We propose to eliminate this presumption for SPACs that meet certain criteria to strengthen investor protection, while maintaining the proper functioning of the market “, indicates the FCA in an open public consultation on the regulation of the SPAC.
Thus, in its conclusions, presented this Tuesday, the supervisor defends that the proposed changes have been designed to provide an alternative approach for the SPAC. Otherwise, it is assured, they should provide detailed information about a proposed target to the market to avoid being suspended.
Among the additional safeguards, the FCA highlights the introduction of a ‘redemption’ option that allows investors to exit a SPAC before any acquisitions are completed, in addition to ensure that money raised from shareholders is protected and that shareholder approval is required for any proposed acquisition, while SPAC sponsors who do not meet the conditions, or choose not to, will continue to be subject to the presumption of suspension.
The FCA has also decided reduce up to 100 million pounds (117 million euros) instead of 200 million pounds (234 million euros) the minimum amount required for a SPAC to start trading.
Also, an option will be introduced to extend the two-year operating term by six months without the need to consult shareholders of the SPAC under certain exceptional circumstances in order to provide more time to the investment vehicle that was immersed in a transaction.
These new rules, which They will come into force on August 10“They” aim to provide more flexibility to the largest SPACs, provided that they incorporate certain features that promote investor protection and the proper functioning of the markets, “the FCA said.
The initiative is part of a process in which the financial authorities of a large number of European countries has joined in recent months in order to attract these new companies to boost their markets. In Spain, the National Securities Market Commission (CNMV) itself has taken steps in the matter and the Government has also launched a regulatory reform that will allow a better accommodation of these investment vehicles to the Spanish system.