The Securities and Commodities Authority (SCA)’s approval of the region’s first Special Purpose Acquisition Company (SPAC) regulatory framework has paved the way for the listing of the first SPAC on the ADX this year.
The first of its kind in the GCC, the SPAC regulatory framework was developed by ADX and Abu Dhabi’s Department of Economic Development (DED), in conjunction with the SCA and legal and investment specialists. Benchmarked and assessed against best-in-class US and international SPAC regulations, the robust framework will provide international investors with access to unique growth opportunities. The regulation also makes provisions for sponsors outside of the UAE, giving them the ability to apply for approval to list their SPACs on the ADX.
Created with attractive incentives and an innovative share structure, the UAE SPAC regulations provide sponsors with a seamless and efficient process to take companies public. Sponsors will be required to raise a minimum of AED 100 million in the Initial Public Offering (IPO) and units sold will comprise warrants that give investors and sponsors the right to convert them into shares. To protect investors, once the IPO is complete a SPAC must ensure that 90% of proceeds are placed in a non-interest-bearing account.
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