After already being late to the blank cheque boom, Hong Kong faces more SPAC headwinds with China’s securities regulator reportedly barring mainland investment banks from acting as promoters.
The China Securities and Regulatory Commission (CSRC) has decided to follow through on the restrictions communicated to mainland investment banks last year, according to a «Reuters» report citing unnamed sources, due to concerns about risks.
While Investment banks will not be allowed to act as promoters, they are still allowed to work as advisors to special purpose acquisition companies (SPAC) transactions.
Brokerage Lobbying
Chinese brokerages are not settling and are lobbying the CSRC to change the rules to allow them to participate as SPAC promoters, the report added.
Meanwhile, institutions affiliated with mainland commercial banks have been given the green light to be promoters.
Hong Kong approved the first application for a SPAC listing in January and there are eight such vehicles that have submitted preliminary filings, according to the local exchange.
