Other notable features of the rules include:

• SPAC is not required to be incorporated in Singapore: SPAC need not be incorporated in Singapore, departing from the proposed mandatory Singapore-incorporation requirement given concerns that a Singapore-incorporated company is limited by certain capital maintenance provisions of the Companies Act which would restrict the share buyback exercise, conducted pursuant to the independent shareholders’ redemption exercise at the point of de-SPAC.
• No dual-class share structure: SPACs will not be permitted to implement a dual-class structure at the time of its IPO.
• Minimum equity participation for sponsors: Sponsors must subscribe to at least 2.5 per cent to 3.5 per cent of the IPO shares, units or warrants depending on the market capitalisation of the SPAC.

What can we ‘exSPACt’ moving forward?

The global race to attract quality listings is intensifying. SGX’s new SPACs listing framework comes closely after the UK Financial Conduct Authority published new rules on listing SPACs on the UK’s Official List, covered in our article “New rules for listing SPACs in the UK” of 30 July 2021. As one of the first Asian bourses to formalise a listing framework for SPACs, SGX is expected to enjoy a first mover advantage in Asia in drawing quality listings through SPACs, in particular for fast-growing new tech and new economy companies based in Asia.

Reed Smith LLP is licensed to operate as a foreign law practice in Singapore under the name and style, Reed Smith Pte Ltd (hereafter collectively, "Reed Smith"). Where advice on Singapore law is required, we will refer the matter to and work with Reed Smith's Formal Law Alliance partner in Singapore, Resource Law LLC, where necessary.

Client Alert 2021-235