CP21/10: Investor protection measures for special purpose acquisition companies: Proposed changes to the Listing Rules

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In this consultation paper (CP) we are proposing changes to aspects of our Listing Rules that apply to special purpose acquisition companies (SPACs).

Read CP21/10 (PDF)

Why are we consulting:

Our current rules set a presumption of suspension for a SPAC’s listed shares when it identifies a potential acquisition. This potentially imposes a disproportionate barrier to listing for larger SPACs that build specific investor protections into their structures, while suspension also prevents investors from selling their shares.  

We propose to remove the presumption of suspension for SPACs that meet certain criteria. By setting clear conditions under which we will not look to suspend, our rules will provide strong investor protection, give greater certainty for issuers, and align more closely with standards in other international markets.

Where SPACs do not meet these criteria, our existing rules requiring them to provide detailed information to the market on a proposed target to avoid a suspension will continue to apply.

Even if we proceed to make changes, SPACs remain a more complex investment. Investors should ensure they understand the key risks and features of a SPAC before deciding whether to invest.

Who it applies to:

  • prospective investors in SPACs, including institutional and individual investors
  • prospective issuers of SPACs considering a UK listing and prospective acquisition targets
  • law firms, investment banks and other advisors and intermediaries who may assist in creating and advising on SPAC offers
  • exchanges or venue operators who admit SPACs to their markets
  • intermediaries who may facilitate investments into a SPAC, including providing execution and/or marketing services, whether at initial public offering (IPO) or in secondary markets
  • trade associations representing the various market participants noted above
  • wider financial market participants, such as research analysts

Next steps:

Online response form

We are asking for comments on this CP by 28 May 2021.

You can send them to us using the online response form, or by email [email protected] 

Or, in writing to: Capital Markets Policy, Financial Conduct Authority, 12 Endeavour Square, London E20 1JN.