Hong Kong Stock Exchange proposes a new listing regime for SPACs

The Hong Kong Stock Exchange released a consultation paper on proposals to create a new listing regime for special purpose acquisition companies (“SPACs”). SPACs, should the proposed regime be adopted, will be a legitimate form of “cash shell” that raises funds through an IPO with the sole purpose of identifying a business target (“De-SPAC Target”) and negotiating a “De-SPAC” transaction through which the De-SPAC Target achieves a backdoor listing. 

The Exchange has stressed that it has not formed any view on whether a SPAC regime should be introduced in Hong Kong and it wishes to use the public consultation to generate discussions and gather public views.