Earlier this year the FCA issued consultation proposals (CP21/10) on changes to aspects of the Listing Rules that apply to special purpose acquisition companies (SPACs). A SPAC is a type of company formed to raise money from investors, which it then uses to acquire another operating business. The proposed changes were designed to provide an alternative approach for SPACs that must otherwise provide detailed information about a proposed target to the market to avoid its listing being suspended.
Following the closure of the consultation at the end of May, the FCA has now issued a policy statement (PS21/10) setting out new rules and guidance that will come into force on 10 August 2021.
In the policy statement the FCA reports that the main changes it has made to its original proposals in response to the consultation feedback, where a SPAC wishes to avoid suspension, are to:
- Lower the minimum amount a SPAC would need to raise at initial listing from £200m to £100m.
- Introduce an option to extend the proposed 2-year time-limited operating period (or 3 year period if extended with shareholder approval) by 6 months, without the need to get shareholder approval. The additional 6 months will only be available in limited circumstances and is intended to provide more time for a SPAC to conclude a reverse takeover where a transaction is well-advanced.
- Modify the FCA’s supervisory approach to provide more comfort prior to admission to listing that an issuer is within the guidance which dis-applies the presumption of suspension, rather than only at the point of an announcement.
Other than the above the FCA states that it is implementing its consultation proposals largely unchanged, with minor modifications to provide further clarity and regulatory certainty.