Special Purpose Acquisition Company (SPAC)

Listing of SPACs in Hong Kong 

Due to the proliferation of SPACs IPOs in recent years especially in the US¹ , the Securities and Futures Commission (SFC) and the Hong Kong Exchanges and Clearing Limited (HKEX) were asked in the Financial Leaders Forum chaired by the Financial Secretary, Mr Paul Chan, on 1 March 2021 to explore suitable SPAC listing regimes to enhance the competitiveness of Hong Kong as an international financial centre while safeguarding the interests of the investing public.

Subsequently, in September 2021, the HKEX has published a consultation paper seeking public feedback on proposals to create a listing regime for SPACs in Hong Kong (Consultation Paper). The related Consultation Conclusions was published in December 2021 and the regime became effective from 1 January 2022. .  

Activities by the Institute to support consistent application 

In January 2022, the Institute published Accounting considerations for a Special Purpose Acquisition Company. The publication describes the structure and lifecycle of a typical SPAC and highlights certain key accounting considerations that may be relevant to a typical SPAC throughout its lifecycle.

The Institute is closely monitoring the development of the SPAC listing regime and will consider issuing additional guidance if necessary. 

The Institute has organized webinars to provide stakeholders with knowledge of SPACs, including:

• Introduction of Special Purpose Acquisition Companies
• E-learning webinar: SPAC listing and its valuation  

Other useful resources

There are many accounting issues that a SPAC should consider throughout its lifecycle. The materials below also highlight some of these issues. 

• A Closer Look - Financial reporting considerations for SPACs (Deloitte)
• Applying IFRS - Accounting for SPACs (EY)
• Listings via SPACs – financial reporting and accounting considerations (PwC)
• Staff Statement on Accounting and Reporting Considerations for Warrants Issued by SPAC (US SEC)
• What You Need to Know About SPACs – Updated Investor Bulletin (US SEC)  

Last updated: 21 January 2022