Out-Law / Your Daily Need-To-Know
The Singapore Exchange (SGX) is considering allowing Special Purpose Acquisition Companies (SPACs) to list on the stock exchange by the middle of this year.
It has published a consultation on a proposed framework for the listing of SPACs, which allow investors to buy shares in a vehicle that then buys companies or assets.
According to SGX Regulation chief executive Tan Boon Gin, the proposed framework is designed to ensure that the SPACs listed in Singapore are credible vehicles that "result in successful value-creating business combinations for their shareholders". Proposed requirements include that SPACs have a minimum market capitalisation of S$300 million; that they be incorporated in Singapore, and that they have a maximum time frame of 36 months to acquire underlying assets.
Tax and private wealth expert Valerie Wu of Pinsent Masons MPillay, the Singapore joint law venture between MPillay and Pinsent Masons, the law firm behind Out-Law, said that the allowing SPACs to list in Singapore would present exciting investment opportunities to high net worth individuals and family offices establishing their presence in Singapore.
"With a growing number of family offices establishing a presence in Singapore and, along with them, the onshoring of their assets in Singapore, SPACs in Singapore may offer these family offices the high-growth, dynamic investment opportunities they are looking for," she said.
Wu said that the families and ultra-high net worth individuals behind these family offices have strong track records, unique expertise and network of resources in their respective sectors and that family offices may also be the ideal sponsors in SPAC deals.
Tax and private wealth specialist Zhu Lin, also of Pinsent Masons MPillay, said: "High net worth individuals looking to invest in SPACs, whether Singapore-listed or otherwise, should be mindful of the potential tax implications resulting from a successful IPO and business combination, and take advice in anticipation of key events in the SPAC's life cycle."
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