The international financial regulation of SPACs between legal standardised regulation and standardisation of market practices
Special Purpose Acquisition Companies (‘SPACs’) are a new phenomenon in financial markets, and there is scant academic literature on the topic. This paper aims to provide a thorough overview of the remarkable story of SPACs from their origin, through blank check companies, to the development of a modern conception of SPAC. A comparative study is carried out by taking into account financial regulation and the ways in which SPACs are governed in different capital markets. Specifically, the American markets are examined, as well as new models of SPACs which have recently appeared on the Bursa Malaysia, the Toronto Stock Exchange and the Korea Exchange. To this end, the final consolidating remarks will serve as a way to evaluate proposals for a new international trend for global financial markets to follow in the coming years.
KeywordsFinancial regulation Financial markets Soft law SPACs
This paper has been awarded the Colin B. Picker Prize (honourable mention) by the American Society of Comparative Law in 2017. The Author is grateful to his supervisor Prof. Michelle Everson at Birkbeck University of London for her invaluable insights on Special Purpose Acquisition Companies.
- 1.Cooper, Price Waterhouse 2018. The Rise of SPACs in the IPO market, 7 February 2018. http://pwc.blogs.com/deals/2018/02/the-rise-of-spacs-in-the-ipo-market.html. Accessed 28 June 2018.
- 2.Riemer, Daniel S. 2007–2008. Special Purpose Acquisition Companies: SPAC and SPAN, or blank check redux? Washington University Law Review 85(4):931–934.Google Scholar
- 3.Castelli, Tim. 2009. Not guilty by association: Why the taint of their ‘blank check’ predecessors should not stunt the growth of modern special purpose acquisition companies. Boston College Law Review 50(1): 237–244.Google Scholar
- 4.Sjostrom, William K. 2008. The Truth about Reverse Mergers. Entrepreneurial Business Law Journal 2: 743–756.Google Scholar
- 5.Davidoff, Steven M. 2008. Black Market Capital. Columbia Business Law Review 2008: 172–225.Google Scholar
- 6.Lewellen, Stefan M. 2009. SPACs as an asset class. Working paper, Yale University, 1, 5. http://ssrn.com/abstract=1284999. Accessed 23 October 2016.
- 7.Goode, Roy. 2011. Principles of Corporate Insolvency Law. 4th ed, 4. London: Sweet & Maxwell.Google Scholar
- 8.D’Alvia, Daniele. 2017. SPACs: Limiti e prospettive tra hard law e soft law. Rivista del Diritto Societario 4: 1167–1182.Google Scholar
- 10.Moloney, Niamh. 2010. EU financial market regulation after the global financial crisis: “More Europe” or more risks? Common Market Law Review 47(5): 1317–1319.Google Scholar
- 11.Sjostrom, William K. 2008. The Truth about Reverse Mergers. Entrepreneurial Business Law Journal 2: 743–756.Google Scholar
- 12.Shapiro, Mary L. 1990. Seeking New Sanctions: Comments on Developments in the Commission’s Enforcement Program. http://www.sec.gov/news/speech/1990/030990schapiro.pdf. Accessed on 17 February 2017.
- 15.Securities Commission Malaysia. Equity Guidelines. http://www.sc.com.my/wpcontent/uploads/eng/html/resources/guidelines/equity/gl_equity_131218.pdf. Accessed on the 15th of September 2016.
- 16.Gullifer, Louise, and Jennifer Payne. 2011. Public Offers of Shares. In Corporate Finance Law Principles and Policy, ed. Gullifer Louise and Jennifer Payne, 407–416. London: Hart Publishing.Google Scholar
- 17.Davidoff, Steven M. 2008. Black Market Capital, 175–225. New York: Columbia Business Law Review.Google Scholar
- 18.Financial Conduct Authority. 2018. Technical Note on Cash Shell and Special Purpose Acquisition Companies (SPACs), January 2018 UKLA/TN/420.2. https://www.fca.org.uk/publication/ukla/tn-420-2.pdf. Accessed on 10th October 2018.
- 19.Lastra, Rosa. 2006. Legal Foundations of International Monetary Stability, 462. Oxford: OUP.Google Scholar
- 24.Murray, James. 2017. Innovation, Imitation and Regulation in Finance: the evolution of Special Purpose Acquisition Corporations. Review of Integrative Business and Economics Research 6(2): 1.Google Scholar