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LuxSE issues SPAC listing guidelines

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19 August 2021

To position itself as an attractive listing venue for the booming European market for special purpose acquisition companies (SPACs), the Luxembourg Stock Exchange (LuxSE) has created a framework to provide sponsors with guidance for the successful listing of SPACs on its markets.

It includes a set of recommendations for the structuring and prospectus drafting process which is designed to complement the general admission rules of the LuxSE. The LuxSE also highlights that its regulated market and the Euro MTF operate professional segments, which allow SPACs that do not target retail investors to restrict shareholding to professional or qualified/well-informed investors.

These recommendations bolster the overall framework applicable to initial public offerings of Luxembourg SPACs, although the LuxSE specified that these guidelines do not constitute an exhaustive or mandatory list of features for Luxembourg listed SPACs. 

More details on the content of these recommendations are set out below.

Recommendations 

Escrow account

The proceeds from the IPO (and private placement) should be placed in an escrow account with a regulated financial institution with a documented order of priority for outgoing payments.

Redemption rights

Before the consummation of the business combination, the SPAC shareholders should be able to exercise their redemption rights granted and described by the issuer. 

De-SPAC process

The business combination with the target (de-SPAC process) should be approved in a general meeting by the majority of the SPAC shareholders having all the necessary information.

Business strategy

The business strategy of the issuer regarding the target industries and geographies where it seeks acquisition opportunities should be described In the prospectus accompanying the admission to trading.

Timeframe for the consummation

The timeframe to complete the business combination shall be specified.