Tailored regulatory standard
The new regulatory framework provides for a designated regulatory standard for SPACs, which is tailored to a SPAC’s needs. The new standard would enable a listing of both shares and convertible bonds of a SPAC.

Internationally proven structure
The consultation draft defines as SPAC any company whose sole purpose is to directly or indirectly acquire or merge with one or several acquisition targets (so-called De-SPAC) and which is dissolved after a maximum of three years if no De-SPAC has taken place by then. The draft adopts other currently typical features of SPACs, such as the deposit of the IPO proceeds in a trust account, SPAC investors› approval of a De-SPAC, as well as SPAC investors› redemption right in the event of a De-SPAC.

IPO and De-SPAC transparency
At the time of the SPAC IPO, additional information is to be included in the prospectus. In the event of a De-SPAC, an information document would have to be published that would contain many elements of a prospectus. If the target company does not have financial statements covering three financial years in accordance with a recognized reporting standard, quarterly financial statements would have to be published in the two financial years following the De-SPAC.

Effectiveness possibly before the end of the year
We very much welcome the fact that SIX Exchange Regulation has drafted the new regulatory framework in a short period of time. The new rules could take effect as early as towards the end of 2021.

Homburger will continue to give updates on developments in this area.