The Saudi Capital Market Authority is looking to create a legal framework to allow SPAs to list in the kingdom.
“This is one of the things that we allow companies to access more easily,” said Yazid Saleh Al-Damiji, Undersecretary for Strategic and International Affairs at the Capital Market Authority, at the Financial Sector Conference in Riyadh, Thursday.
Special purpose acquisition companies are defined as companies that are created specifically to invest in the capital markets, as these companies are considered an entity listed in the capital market in order to acquire other companies and make their shares available to investors, and these companies do not have commercial operations and collect their capital entirely through offerings .
These companies are also called Blank Check Companies or “blank check” companies, and this is mainly due to investors not being informed of the future plans of the company and thus not knowing how to invest their money, which is equivalent to giving these companies a blank check by the investor in reference to the risks that Including investment operations in these companies.
Saudi Arabia’s plans come after these companies have quickly gone from being one of the latest trendsetter on Wall Street to a sector besieged by poor returns, canceled deals and fading investor enthusiasm.
After explosive growth – mainly in the US – as everyone from politicians to celebrities and Wall Street giants rushed to create them amid rock-bottom interest rates, the frenzy collapsed as regulators put the products under greater scrutiny and higher interest rates diverted the interest of many investors.
In the Middle East, the SPAC market is still small. A blank check company backed by Abu Dhabi Sovereign Fund ADQ and Simera Investments was the first company to list in the region last year, while the plans of two other companies were delayed.
