FCA's New Rules For SPACs

Summary

In response to Lord Hill's review of the UK Listing Regime, the FCA consulted earlier this year on changes to the Listing Rules for special purpose acquisition companies (SPACs).  The proposed changes remove the presumption of suspension of trading in a SPAC's shares upon the announcement of a potential business combination (a so-called "de-SPAC transaction") until publication of a prospectus by the enlarged group.  This was a unique feature of the UK Listing Rules and one of the main reasons SPACs have chosen to list on other European exchanges to date rather than in London.

Following its consultation, the FCA has now published new rules and guidance which will come into force on 10 August 2021. The FCA believes these new rules provide greater flexibility to larger SPACs, provided they embed certain features that promote investor protection and the smooth operation of our markets. In providing this alternative approach for SPACs, it is clear that the FCA