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FAQs about SPAC

 

Q1: What is a SPAC

A SPAC (special purpose acquisition company), also known as a blank check company, refers to a special way of going public. By establishing a SPAC as a shell company through an IPO, the sponsor intends to raise capital from investors in order to acquire a target company within a limited time frame, which will be taken public quickly through the acquisition.

 

The SPAC listing mechanism was introduced by the HKEX on December 16, 2021, and took effect on January 1, 2022.

 

Q2: What are the requirements for individuals to participate in HK SPAC IPOs?

A: You need to qualify as a professional investor.

 

Q3: What is the trading unit for an HK SPAC IPO?

A: The minimum trading amount is HK$1 million.

 

Q4: What are the allocation rules for an HK SPAC IPO?

A: There's no universal allotment rule for HK SPACs. We cannot guarantee the number of shares allotted to you as this depends on the sponsor and underwriter. There are chances that you may not be allotted shares or you may be allotted 100% of the shares you requested.

 

Q5: Is grey market trading supported for HK SPAC IPOs?

A: Grey market trading is not supported, but professional investors can sell SPAC shares after the market opens on the IPO day.

 

Q6: Are the affiliated persons of a SPAC and their close associates allowed to trade the listed SPAC securities before completing the merger?

A: No.

 

Q7: Is it possible to tell the operational advantages or risks of the target company to be merged with on the SPAC IPO day?

A: No. There is not a definite target company on the IPO day of a SPAC, and the target company is not limited to a specific industry, field, or geographical area. As a result, you will not be able to tell the operational advantages or risks of the target company.

 

Q8: What is the time frame for a SPAC to complete the merger?

A: A SPAC needs to announce the merger within 24 months after the IPO date and complete the merger within 36 months after the IPO date, with a possible extension of up to six months. If the above conditions cannot be met, the HKEX may apply a trading halt to the SPAC and request the SPAC to return the funds raised from the IPO to all SPAC shareholders within one month after the trading halt.

协议及声明

FAQs about SPAC

 

Except for public holidays and the market closure due to bad weather, the Hong Kong stock market generally trades from Monday to Friday. The trading hours are as follows:
 

1. Pre-open Period

Time period

Trading Rules

Enter order 9:00-9:15

Submit, modify, and cancel auction market orders and auction limit orders

Non-cancellable 9:15-9:20

Only at-auction market orders and at-auction limit orders can be submitted, and orders cannot be withdrawn or modified

Random match period 9:20-9:22 (match will start randomly at 9:20-9:22 at the final reference equilibrium price)

Conduct matchmaking during auction period

Pause period, from random match period ends to 9:30

At-auction order: Incomplete order will be cancelled by the system; At-auction limit order: If the input price range of an incomplete order does not deviate from the nominal price by nine times or more, it will be converted to a limit order and automatically transferred to the continuous trading session

 

2. Continuous Trading Hours

Time period

Beijing Time

Morning market

9:30-12:00

Closed at noon

12:00-13:00

Afternoon market

13:00-16:00

Note: Order modification is not allowed during the closed at noon, and cancellation is allowed during 12:30 - 13:00.

 

3. Closing Auction Trading Session

Time period

Trading Rules

Closing auction period 16:00-16:01      

Calculate and publish reference price; orders cannot be submitted

Enter order 16:01-16:06

You can submit, modify, and cancel at-auction market orders and auction limit orders. The price limit of auction limit orders shall not exceed ±5% of the reference price

Non-cancellable 16:06-16:08

At-auction market orders and at-auction limit orders can be submitted, and cannot be cancelled or changed; the input price of at-auction limit orders must be between the lowest selling price and the highest bidding price

Random closing 16:08-16:10

At random closing time, at-auction market orders and at-auction limit orders can still be submitted, and cannot be cancelled or changed; the input price of auction limit orders must be between the lowest selling price and the highest bidding price