UAE SCA approves GCC’s 1st SPAC regulatory framework

By Arya M Nair, Official Reporter
  • Follow author on
Representational image

The UAE Securities and Commodities Authority (SCA) has approved the Special Purpose Acquisition Company (SPAC) regulatory framework, the first of its kind in the GCC, opening the way for the first SPAC to list on the Abu Dhabi Securities Exchange (ADX) this year.

The SPAC regulatory framework was developed by ADX and Abu Dhabi’s Department of Economic Development (DED), in collaboration with the SCA and legal and investment specialists.

The framework will provide global investors with access to unique growth opportunities, having been benchmarked and assessed against the best-in-class US and international SPAC rules. The regulation also includes options for sponsors based outside the UAE, allowing them 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 $27.2 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 percent of proceeds are placed in a non-interest-bearing account.

Hisham Khalid Malak
Hisham Khalid Malak
Chairman – ADX

“We are excited to be creating a regional hub for SPACs on ADX. We are committed to rolling out the SPAC framework in a timely manner and preparing the exchange to be operationally ready to support sponsors with listings, marketing, and communication advice. The introduction of SPAC regulations complements our efforts to execute our ‘ADX One’ strategy by bringing the most sought out products and services to investors, including Covered Short Selling, Securities Lending and Borrowing, market making and Exchange Traded Funds.”

H.E. Mohamed Ali Al Shorafa Al Hammadi, Chairman of Abu Dhabi Department of Economic Development, commented “The introduction of a regulatory framework to support SPAC IPOs is testament to Abu Dhabi’s commitment to being at the forefront of innovation. Abu Dhabi’s strong regulations, coupled with its tax-free status, stable business environment and a strong pipeline of fast-growing regional companies, have created attractive opportunities for SPAC sponsors looking to take companies public.”

Related: ADX unites with London’s FTSE Russell to develop new benchmark indices