New rules have been introduced which allow Special Purpose Acquisition Companies (SPACs) to be listed on the Channel Islands Securities Exchange (CISE).

A SPAC is a cash shell which is used to raise money for a very specific investment objective.

The SPAC is growing again in popularity as international markets recover from the global financial crisis and now the CISE has launched specific rules to introduce it as a new product.

Fiona Le Poidevin, CEO of the CISE, said: “We have been able to introduce our SPAC rules in a timely manner, which demonstrates the responsive nature of the CISE in meeting the needs of current and potential clients.

“The new SPAC rules have been designed to be commercially attractive for management teams and yet also offer robust integrity for investors so we expect that this, combined with our competitive fee regime, will mean that they prove attractive in the marketplace. Indeed, even though the rules are only just coming into effect, we have already received a couple of enquiries.”

The key benefits for listing a SPAC on the CISE include the low minimum market capitalisation, a 36 month timeframe for an acquisition and an extremely competitive and transparent fee regime.

The new rules are effective from today [Monday 23 November]. 

Mrs Le Poidevin added: “The CISE already admits 600 investment funds and companies so the introduction of the SPAC rules adds another product to our range, which also includes trading companies and specialist debt vehicles.”

A SPAC is an investment vehicle although it would tend to be quicker and cheaper to establish than a fund, while not having the same spread of risk. This has contributed to the popularity of the SPAC waxing and waning over the years but there has been a significant renewed interest more recently as groups of sophisticated investors seek higher returns by backing management teams with a proven track record in specific asset classes.

Fiona Le Poidevan, CEO of the Channel Islands Securities Exchange.