Swiss Spac regulation limits innovation | company financing

Switzerland had to wait a long time. After an additional regulatory round, a new listing standard developed by SIX for listed shell companies will go into effect on Monday. From now on, so-called Spacs (Special Purpose Acquisition Companies) can be listed and traded on the Swiss Stock Exchange.

Simply put, their business model consists of raising capital through an IPO in order to acquire an unlisted company within a certain period of time, which will trade on the stock exchange after the merger (De-Spac), which must be approved by the investors. If the deal fails, the investors get their money back without a loss.

Switzerland opens up new horizons

With the new listing standard, Switzerland, along with Singapore, is one of the few jurisdictions that have created dedicated regulations for these shell companies. The goal is to enhance transparency and protect the investor. Even in the USA, where the majority of these blank check companies are going public (about 550 since the beginning of the year), the Securities and Exchange Commission is not expected to submit appropriate proposals for legal regulation until the beginning of 2022.