The IPO market may be dead for now, but so-called Special Purpose Acquisition Companies are coming to the Toronto Stock Exchange.

According to Friday’s OSC Bulletin, the Toronto Stock Exchange has adopted, and the Ontario Securities Commission has approved amendments to add a section to its rulebook to introduce SPACs to the Canadian market.

SPACs are similar to capital pool companies in that both involve the creation of publicl -traded shell companies which later acquire an operating business using the initial proceeds raised. However, SPACs are much larger than CPCs and therefore involve more stringent investor protections.

In recent years these sorts of issues have become an increasingly prominent feature of the US IPO market. “As a result of the growing market acceptance of SPACs in the United States, and building on the CPC concept, TSX is adopting [the new rule] to provide a framework for the listing of SPACs on TSX,” it says.

The notice indicates that the TSX intends to publish a staff notice summarizing the key disclosure requirements and other operational issues that may arise for SPACs.

IE