The city, which is currently drafting rules for SPAC listings, wants to limit access for retail investors to buy and trade blank check companies.
Under proposed rules, only professional investors with assets of more than HK$8 million ($1 million) will be able to participate in both the primary and secondary market, according to a «Bloomberg» report on Friday, citing people familiar with the matter.
Limiting retail investor access could mitigate risks in the initial phase and ensure a smooth start to allow for an expansion later, the people said.
Questions remain on the market cap size for SPAC deals. The minimum market capitalization requirement for main board companies stands at HK$500 million ($64 million).
Singapore Eases Rules
Special purpose acquisition companies, or SPACs, are are shell companies formed for the sole purpose of raising money through an IPO to buy a private company.
While Hong Kong previously expressed interest in the SPAC boom, which started in the U.S. in 2020, the city only launched a consultation regarding the listing framework for SPACs this month.
Rival financial hub Singapore is reportedly readying to issue easier rules for SPAC listings in the city-state, following market feedback that some of SGX’s earlier proposals were too strict.
