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Financial Conduct Authority’s Future Consultation on SPACs

Client Updates

On 3 March 2021, we highlighted that Lord Jonathan Hill had published his report into his review of the UK’s listing regime, setting out his recommendations to increase the attractiveness of London as a listing venue, including to SPAC sponsors. 
 
Following the Lord Hill report, the UK’s Financial Conduct Authority has today announced that:

  • it will shortly be consulting on Listing Rule changes to strengthen protections for investors in SPACs
  • the proposals will help to ensure that SPACs operate within a framework of high regulatory standards and oversight
  • if such protections are put in place, it considers that the existing presumption that a SPACs shares should be suspended on announcement of an acquisition (cited as being one of the principal reasons why SPAC sponsors have favoured other listing venues over London) will no longer be required

 
The consultation will consider structural features of SPACs and enhanced disclosure, including a minimum market capitalisation and a redemption option for investors thought to be required to provide appropriate investor protection. 
 
The consultation period is expected to be open for four weeks, and the revised rules and associated guidance issued by early summer. By responding to the report from Lord Hill in four weeks and indicating that the new rules should be introduced within three months is a clear sign that the FCA is responding to HM Government’s desire that London should remain competitive and be more “nimble” after Brexit.

Please click here to view a previous article we did on the UK SPAC Market titled ‘The UK Opens the Doors to SPACs’.

 

 

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