FCA Moves to Deregulate SPACs

Following the release of the Hill Report at the start of last month, the FCA has announced that it is going to open a consultation into changing the Listing Rules and connected guidance with a view to encouraging the listing of Special Purpose Acquisition Vehicles (SPACs).

The consultation will focus on establishing a framework within which the current rules imposing a presumption that the shares of a SPAC will be suspended from listing when it announces that it has identified a target will no longer apply.  To ensure investors are still protected, the FCA is considering imposing enhanced disclosure and structural requirements such as a minimum market capitalisation and a redemption option.  Overall the intention is to align the UK’s rules more closely with other major jurisdictions.

The FCA clearly intends to move fast to introduce new rules, and is aiming to do so by the early summer.

It’s good to see the FCA beginning to implement the Hill Report’s recommendations so quickly following its release, and hopefully further consultations on other recommendations such as reform of the prospectus regime will begin shortly.

This blog has been drafted and provided by Kingsley Napley LLP. It should be used for informational purposes only. The information is based on current legislation and should not be relied on as an exhaustive explanation of the law or issues involved without seeking legal advice.

Further Information

For further information on issues raised within this blog, please contact John Young or a member of our Corporate and Commercial law team.

About the Author

John Young is a partner in the corporate and commercial team and specialises in the business needs of entrepreneurial, high growth and family businesses, advising them throughout their lifecycle – from start-up through to listing and beyond.