SECP Introduces Framework For SPAC
Umer Jamshaid Published September 21, 2021 | 06:50 PM
ISLAMABAD, (UrduPoint / Pakistan Point News - 21st Sep, 2021 ) :The Securities and Exchange Commission of Pakistan (SECP) has amended the Public Offering Regulations, 2017 to introduce a regulatory framework for Special Purpose Acquisition Companies (SPAC).
The introduction of SPAC in Pakistan's market is expected to boost up activities in the Primary market, encourage new listings and help companies to tap capital for large scale merger/acquisition transactions, said a press release issued here.
It would also enable investors/public to co-invest with sophisticated, highly experienced managers and benefit from the appreciation in the share value of acquired units.
A SPAC is a company with no commercial operations that is formed strictly to raise capital through an initial public offering (IPO) for the purpose of merger/acquisition transactions. The concept of SPAC prevails in many developed countries like USA, Canada, and Malaysia.
Under the proposed regulatory framework, SPAC shall be a public limited company having a paid-up capital of not less than PKR 10 million.
The SPACs promoters/sponsors, directors and CEO shall meet the fit and proper criteria.
To safeguard the interests of shareholders, SPAC is required to keep 90% of the funds raised through IPO in an escrow account managed by the custodian.
Those funds can only be utilized for merger or acquisition transactions within a permitted time period of three years (36-months).
The escrow funds can be invested in permitted investments. Each merger or acquisition transaction shall be approved by the shareholders by way of special resolution.
Upon merger, the merged entity shall be listed and shareholder/(s) disapproving the merger or acquisition are entitled for refund of money out of escrow account in line with these regulations. SPAC investors may exercise a redemption right if they dissent from SPAC's proposed merger/acquisition transaction.
The amendments to the Public Offering Regulations, 2017 relating to SPAC can be accessed at SECP's webpage at https://www.secp.gov.pk/document/s-r-o-1214-i-2021-regulatory-framework-for-spac/?wpdmdl=43389&refresh=6149bac9d7f351632221897
Related Topics
Recent Stories
Rock-solid Ruud racks up season-leading win in Barcelona
At UN, Iran says it will make Israel 'regret' reprisals
G7 hears calls for 'critical' Ukraine aid
EU seeks to leverage might to confront China, US challenge
5 Customs officials martyred as their vehicle ambushed by terrorists in D I Khan
Pak-New Zealand match called off due to rain
NHA restores traffic on roads affected by recent rains in Balochistan
China to fully support Pakistan's efforts against terrorism: Ambassador Jiang
U.S. envoy calls on Foreign Minister Ishaq Dar
Poland arrests man over suspected plan to kill Zelensky
EU wants to ease youth movement to and from UK
Police foils attempt of supply mainpuri raw material
More Stories From Business
-
Pakistan's total liquid foreign reserves reach $ 13.37 billion
4 hours ago -
Stock markets rise as traders consider US rate outlook
4 hours ago -
Business community alarmed by alleged Cigarette tax violations
5 hours ago -
High FED on cigarettes demonstrates positive impact
5 hours ago -
PTCL posts 14 % revenue growth
4 hours ago -
Prudent policies, reforms poised to result in sustainable economic growth: Governor State Bank of Pa ..
6 hours ago
-
ICCI resolute to turn Islamabad an ecofriendly city: Khalid Malik
5 hours ago -
Beijing's GDP up 6 pct in Q1
7 hours ago -
China's Q1 goods, services trade surplus exceeds 60 bln USD
7 hours ago -
Pakistan Stock Exchange (PSX) loses 43 points
7 hours ago -
KP Govt decides to establish Gem Processing & Export Centre
8 hours ago -
Rupee sheds 04 paisa against dollar
8 hours ago