China bars brokers from promoting SPACs in Hong Kong

The China Securities and Regulatory Commission (CSRC) has barred regulated investment banks from acting as promoters of special purpose acquisition companies (SPACs), also known as blank-cheque firms, in Hong Kong. China’s securities regulator has decided to make the move due to concerns over the risks associated with these investment vehicles. With the restrictions, investment banks will be allowed to work as advisors SPAC transactions under Hong Kong's new rules for such listings, while mainland commercial banks-affiliated institutions, regulated by the China Banking and Insurance Regulatory Commission, have been allowed to be promoters. Chinese brokerages have been lobbying the CSRC to change the rules to allow them to act as promoters as well. The SPAC restrictions come as Aquila Acquisition, a blank-cheque firm backed by China Merchants Bank, has reportedly been fully subscribed on the first day of offering.