Following a strong market trend of increased use of SPACs, Nasdaq has today updated its Main Market Rulebook to allow for SPAC listings on Nasdaq Copenhagen. 

A SPAC (Special Purpose Acquisition Company) is a shell company with no commercial activities whose only purpose is to raise capital in order to acquire one or more existing businesses. By being listed on a regulated market, access to capital can be greatly increased.

SPACs have not traditionally been widely used in Denmark, but there is a strong market trend towards increased use. As such in the U.S, SPAC IPOs have increased 10-fold over the last five years.

However, as Nasdaq ordinary admission requirements includes strict requirements for a company's historical financial information and business operations, and as a SPAC by definition is a new company without a proven track record, specific admission requirements needed in Nasdaq rulebook to be adopted before SPAC lPO's on Nasdaq would be possible.

Following the approval of the Danish Financial Supervisory Authority ('Finanstilsynet'), Nasdaq has today updated its Main Market Rulebook with the introduction of rule 2.18 which allows for SPAC listings and specifically exempts SPACs from the rules regarding historical financial information and business operations – but there is no such thing as a free lunch. As such, the exemption comes with a few strings attached, including:

1.    90% of the IPO proceeds must be deposited

2.    Within no more than 36 months from the IPO, business combination(s) with a value of no less than 80% of the deposited proceeds (i.e. 72% of the original IPO proceeds) must be completed

3.    Until the "80% requirement" in paragraph 2 above has been fulfilled, a number of requirements must be complied with, including:

a. Each business combination must be approved by a majority of independent directors of the board and by the general meeting by a simple majority of votes;

b. In respect of each business combination, the "new" combined issuer must meet the admission requirements, i.e. including the rules regarding historical financial information and business operations. The issuer must initiate a new listing process as soon as possible after the entry into definitive documentation relating to such business combination, and the issuer cannot complete such business combination until Nasdaq has confirmed that the admission requirements will be met; and

c. The issuer's articles of association must provide the shareholders with the possibility of having their shares redeemed in cash equal to their pro rata share of the aggregate amount then in the deposit account. It is possible for the issuer to limit the access to redemption in such a way that any shareholder may exercise such disposal rights down to 10% of the Issuer’s total share capital only.

While the requirements for e.g. general meeting approval and Nasdaq approval may slow down an acquisition process and prevent the use of SPACs in some scenarios, e.g. a structured auction process, the advantages of easier access to capital and the shares of the SPAC being tradable commodities will surely make up for it in other cases.

Nasdaq Copenhagen's former Issuer Rules which were replaced by the harmonized Nordic Main Market Rulebook in May 2020 allowed for SPAC listings. The similarity between the old and the new SPAC rules leads one to call it a re-introduction of SPAC listings and it suggests that Nasdaq expects SPACs to be a part of the future market, also here in the Nordics.  

The SPAC listing option was introduced as of 1 February 2021 but put on hold as it required approval from the relevant authorities. Such approval has been granted today.

With the Danish Financial Supervisory Authority approval of Nasdaq's addition to the Main Market Rulebook today, the way has been paved for SPACs to become an integrated part of the Danish Capital Market and M&A scene.


Lise Lotte Hjerrild


Rune Koster