Arab Finance: The Financial Regulatory Authority (FRA) has issued new regulations governing the listing and delisting of special purpose acquisition companies (SPACs) on the Egyptian Exchange (EGX), the FRA stated.

Under these regulations, SPACs shall submit a request to be listed on the EGX within one month from obtaining their license; otherwise, the license is deemed invalid.

They also shall have a minimum issued and paid-up capital of EGP 10 million to list their shares on the stock market, and are committed to raising their capital in cash to EGP 100 million within three months as of date of listing.

Moreover, a SPAC shall have at least 50 shareholders after subscription, with a minimum free float of 5% of the company’s total shares.

Acquisition offers shall be presented to the company’s extraordinary general meeting (EGM) within six months as of listing. Objecting shareholders will have a 30-day period to exit the company.

In addition, SPACs shall complete their acquisitions within a period of two years at most from being listed on EGX.

These acquisitions could be a full buyout, a controlling stake, or an absolute majority in the target company’s capital or voting rights.

Also, founders must hold onto not less than 100% of their shares in the company until the financial statements of the profitable year are approved and two years have passed after listing.

If the SPACs fail to complete an acquisition within the two-year period, they shall either reduce their capital or re-offer their shares to other qualified investors.

The FRA has also issued further regulations that prohibit company insiders, including board members, executives, and major shareholders owning 20% or more of a company’s capital, from trading during the five working days before and the day after disclosing any significant information.

The regulations stipulate that listed companies shall set bylaws determining trading ban periods and notify insiders of these periods.

Furthermore, all listed companies shall join the Investor Protection Fund to be protected against non-commercial risks.

Companies shall have a three-month grace period to comply with the regulations.

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