For many years, whether you like it or not, the US has exported its practices and culture to the rest of the world. This has been the case in the financial sector as well. The most recent example is with a phenomenon that was born as strictly US-based — SPAC listing. Today, SPAC operations are seen in many parts of the world, with several countries adjusting their own rules to make SPAC operations more favorable. The latest has been Switzerland, which will finally be making SPAC operations legal from December 2021.
Over the past couple of months, the Swiss bourse operator SIX has reviewed SPAC regulations to protect investors before releasing the product as a secure listing and trading method. The regulations include information on founders’ economic interests in the company, a three-year maximum limit for the SPAC to achieve its targeted merger or acquisition, and a lockup agreement barring directors and managers from selling shares for six months.
why it matters
The Swiss may just be starting up in their SPAC journey, but this move may push other countries already offering SPACs to align their current regulations on the basis of the Swiss model. London, for example, has proposed a reduction of the number of shares that must be offered to the public from 25% to 15% to protect investors as much as possible from a SPAC bubble, which continues to be seen as a credible threat.