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Stock Markets
21 Sept 2021
Malaysia’s Securities Commission to Review SPAC
The Index Today
As demand for fund-raising vehicles continues to grow on a global scale, Malaysia’s market regulator and commission will begin to review its Special Purpose Acquisition Companies SPACs framework to boost efficiency.
The move came after a rise in demand for vehicles which provide a faster and cheaper route to the market was seen. Companies are looking for a cost-effective route to enter the market as compared to the traditional IPO route.
It is important to note here that SPACs are basically shell corporations that can be listed on the stock exchange to raise money which can further lead to a possible merger with an established company. SPACS offer a shorter listing time frame and better valuations as compared to IPOs.
The SPAC review will be conducted by the securities commission as a part of their five-year plan. The commission aims to improve local markets and make them more relevant to growing business needs. According to data received by Bloomberg, SPACS has raised $133 billion this year for 524 companies.
The three main goals of the regulator is to streamline the listing process, find better alternatives for small or medium businesses to enter public markets, and develop a system to enable credit enhancements for firms and investors.
©Photo: Reuters
