The SIX Swiss Exchange announced on Tuesday that it will allow the listing and trading of special purpose acquisition companies (SPACs) from December 6.
SPACs are shell companies listed on the stock exchanges with the only purpose of merging with an operational company to ease the latter’s public listing. The company raises money through a traditional initial public offering (IPO) and then utilizes the proceeds for the targeted acquisition.
Commenting on the move, Christian Reuss, the Head of SIX, said: “The SPAC listing standard will complement our ongoing efforts to offer new products and services for current and future issuers. For companies that are ready to go public, SPACs provide an additional option to do so.”
Additionally, the Swiss Exchange has published a set of regulatory specifications for the SPAC listings and assured that it is upholding an appropriate degree of investor protection.
SPACs Are in Demand
Moreover, the official announcement has detailed that only stock corporations under Swiss law can be listed as SPAC, and they will have a maximum of three years for a merger with another operational company. In addition, SPACs can offer convertible bonds instead of shares to the investors.
The Swiss exchange brought forward SPACs when demand for the backdoor public listing of companies is soaring. These vehicles became very popular in the United States as many established companies have preferred the SPAC merger to go public.
Fintech companies like Payoneer, SoFi and Bakkt have taken the SPAC route to recently list themselves on American exchanges, while other popular trading platforms like eToro, TradeZero and TradeStation have inked deals with SPAC companies to become public companies.
