UAE’s Securities and Commodities Authority approves GCC’s first SPAC regulatory framework

The Securities and Commodities Authority (SCA) has approved the GCC’s first Special Purpose Acquisition Company (SPAC) regulatory framework.

The approval will pave the way for the listing of the first SPAC on the Abu Dhabi Securities Exchange (ADX) this year.

The framework was developed by ADX and Abu Dhabi’s Department of Economic Development (DED), in conjunction with the SCA and legal and investment specialists, Abu Dhabi Government Media Office reported.

It will provide international investors with access to growth opportunities, while the regulation also makes provisions for sponsors outside of the UAE, giving them the opportunity to apply for approval to list their SPACs on the exchange.

The Securities and Commodities Authority has approved the GCC’s first Special Purchase Acquisition Company (SPAC) regulatory framework, the latest initiative by @ADX_AE and @AbuDhabiDED to support global investors to capitalise on emerging opportunities in the UAE. pic.twitter.com/btFoUBWVjK

— مكتب أبوظبي الإعلامي (@admediaoffice) January 24, 2022

Sponsors will be required to raise a minimum of Dhs100m in the initial public offering (IPO) and units sold will comprise of warrants that give investors and sponsors the right to convert them into shares. Upon completion of an IPO, a SPAC must ensure that 90 per cent of proceeds are placed in a non-interest-bearing account to protect the interest of investors.

In November last year, ADX and DED had submitted a proposal to SCA to introduce a SPAC regulatory framework.

Read: Abu Dhabi Securities Exchange proposes SPAC regulatory framework

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. A robust financial services sector will serve to attract a wider range of professionals to live, work and invest in the emirate.”

Hisham Khalid Malak, chairman of the Abu Dhabi Securities Exchange, added: “SPACs provide investors seeking to diversify their portfolios with growth opportunities that are protected by some of the world’s strongest regulations. 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.”

Streaming company Anghami became the first Arab technology company to list on Nasdaq in New York in early March last year, through an SPAC deal.

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