Special Purpose Acquisition Companies (SPACs): A Discordant Tale of Two Asian Financial Centres

Special purpose acquisition companies (SPACs) are essentially cash shell entities that raise finances through an initial public offering of securities with the sole purpose of combining, within a limited timeframe, with an unlisted target company. SPAC activity witnessed phenomenal growth since 2020, driven largely by the US markets. Several other jurisdictions, including the two Asian financial centres of Singapore and Hong Kong, have followed suit to establish regulatory regimes for facilitating SPACs. The principal findings of this paper are that, despite strongly competing for the same piece of the pie, the two financial centres have adopted rather divergent approaches to the regulation of SPACs. While Singapore adheres to the US practice quite closely, the Hong Kong regime is far more restrictive. Apart from commercial considerations, this somewhat yawning gap in the regulatory strategies is also attributable to differing regulatory philosophies as well as historical events that have coloured the regulatory thought process.