Syed Rahman assesses the FCA’s approach to SPACs - and the possible risks

As the Financial Conduct Authority has produced proposals to attract special purpose acquisition companies (SPACs) to the UK, Rahman Ravelli’s Syed Rahman assessed the possible implications.

The FCA’s draft measures have been designed to reduce the risks associated with SPACs. Syed’s piece describes the measures that the FCA is looking to put into place and the reasons for them.

His article outlines what SPACs are and how they function as a vehicle for acquiring another company. Syed also explains the reasons behind their sudden recent popularity in the US.

But his article, which was published by Solicitors Journal, also emphasises the risks associated with SPACs. While they have become a huge attraction for investors, he makes it clear that there are no guaranteed gains with SPACs. There is also the potential for any failings or shortcomings in the SPAC process to lead to litigation and / or criminal investigation.

Syed concludes that even though the FCA is looking to bring SPACs to the UK this does not mean they are necessarily a safe bet.

Syed's article featured in Solicitors Journal. (Subscription required)