The Capital Markets (Public Offers, Listings and Disclosures) Regulations, 2023

Section 1. Citation Section These Regulations may be cited as the Capital Markets (Public Offers, Listings and Disclosures) Regulations, 2023.

Section 2. Interpretation Section 2(1)(a) Green Bond Principles, as may be amended, issued and governed by the International Capital Markets Association; Section 2(1)(b) Green Bond Standards including the Climate Bonds Standard, as may be amended, issued and governed by the Climate Bonds Initiative; Section 2(1)(c) Government policies and guidelines including the Kenya National Policy on Climate Change and Green Economy Strategy, among other Government policies; or Section 2(1)(d) any other standard acceptable to the Authority; Section 2(1)(a) is not an executive director ; Section 2(1)(b) does not have a material or pecuniary relationship with the company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") or related persons; Section 2(1)(c) is compensated through sitting fees or allowances; and Section 2(1)(d) does not own shares in the company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") : Section 2(1)(a) a merger, acquisition or joint venture; Section 2(1)(b) the re-organization of the capital structure of the issuer ; Section 2(1)(c) earnings and dividends, whet...

Section 3. Application Section 3(1)(a) the offer or sale to the public in Kenya, of securities in any form, with or without listing ; Section 3(1)(b) the listing of securities by introduction, including crosslisting; Section 3(1)(c) the offer , issue or listing of additional securities by issuers who have made public offers, with or without listing ; and Section 3(1)(d) corporate actions by issuers of listed securities; Section 3(1)(e) private offers.

Section 4. Guiding principles Section establish fair, efficient and transparent capital markets;

Section 5. Approval for offers andlisting Section 5(1) These Regulations shall apply to any offer of securities to the public in Kenya, whether or not the issuer is seeking a listing on a securities exchange in Kenya. Section 5(2) The Authority shall be the competent authority to grant approval for any public offer of securities to the public in Kenya, including a restricted public offer and listing of securities on a securities exchange in Kenya. Section 5(3) A person granted approval by the Authority to offer securities to the public or list the securities on a securities exchange shall state that fact on all announcements of the offer or listing . Section 5(4) Securities approved by the Authority for offer to the public in the primary market of a securities exchange with approval for listing and admission to listing having been issued shall, in respect to a decision to invest, be deemed to have been listed on the date the securities exchange communicates to the issuer its admission to listing : Provided that the issuer shall comply with any conditions or thresholds imposed by the securities exchange in respect to the listing of the securities.

Section 6. Delegation of approval of offers andlisting Section 6(1) The Authority may, upon application by a securities exchange approved as a self-regulatory organization, delegate to the securities exchange the functions set out in subregulation (2) if the Authority is satisfied that the securities exchange has the technical, human resource and financial capacity to carry out the delegated role. Section 6(2)(a) the information memorandum for an offer of securities on any segment of that securities exchange; Section 6(2)(b) a public offer and listing of securities on any segment of that securities exchange; Section 6(2)(c) a secondary issue and listing of securities of issuers on any segment of that securities exchange; Section 6(2)(d) any announcement, circular ("an information document issued to holders of listed securities in connection with proposed corporate action or transaction;") or corporate action in relation to securities listed on any market segment of that securities exchange; or Section 6(2)(e) any other matter relating to any market segment of a securities exchange that the Authority may approve. Section 6(3) A delegation under subregulation (1) shall be in writing...

Section 7. Listing of securities Section 7(1) A securities exchange shall maintain an Official List in respect of all securities listed on the securities exchange. Section 7(2) The securities exchange shall enter into the Official List the particulars of all securities that have been approved for listing . Section 7(3)(a) the total minimum subscription of shares disclosed in the information memorandum approved by the Authority in respect of public offering and listing of securities; and Section 7(3)(b) the minimum subscribers prescribed for the respective market segment under these Regulations. Section 7(4)(a) the name of issuer ; Section 7(4)(b) the name of security; Section 7(4)(c) the International Securities Identification Number for the security; Section 7(4)(d) the total number of securities listed; Section 7(4)(e) the class of security; Section 7(4)(f) the type of security; Section 7(4)(g) the par value of the security; Section 7(4)(h) the listing date; Section 7(4)(i) the trading commencement date; and Section 7(4)(j) the redemption date.

Section 8. Establishment of market segments Section A securities exchange may, with the written approval of the Authority, establish and operate other market segments within the market segments set out in regulation 11 (1) or prescribe or alter the eligibility requirements for such market segments so established.

Section 9. Meaning of “public offer” Section 9(1)(a) an initial offer of securities to the public by an issuer ; Section 9(1)(b) a further or secondary or additional offer of securities to the public by an issuer ; or Section 9(1)(c) an offer for sale of securities to the public by an existing shareholder or shareholders. Section 9(2) A person offers securities to the public in Kenya if such offer is not a private offer as provided in regulation 17 . Section 9(3) For the purposes of this Part, there is an offer of securities to the public if there is a communication to any person which presents information on the transferable securities to be offered, and the terms on which they are offered to enable the offeree to decide whether or not to buy or subscribe for the securities in question and that communication is designed to, or could, reach at least one hundred persons. Section 9(4) The onus will be on the offeror to demonstrate that any offer said to not to be a public offer is a private offer .

Section 10. Issue of securities to the public andlisting Section offer for subscription for new securities;

Section 11. Eligibility to issue securities Section with respect to securities to be listed on the Main Investment Market Segment , the issuer meets the eligibility requirements prescribed in Part A of the First Schedule;

Section 12. Issue by sovereign states Section 12(1) These Regulations shall not apply to the issuance of securities by sovereign states or entities. Section 12(2) Despite sub-regulation (1) , the listing of securities by sovereign states or entities shall require the approval of the Authority before listing .

Section 13. Issue by national or county entities Section The Authority may prescribe different eligibility and disclosure requirements for the issue and listing of securities to the public by a national government entity, a county government or a county government entity.

Section 14. Issuers not seekinglisting Section 14(1)(a) Small and Medium Enterprises Market Segment in the case of equities; and Section 14(1)(b) Small and Medium Enterprises Fixed Income Securities Market Segment in the case of debt securities. Section 14(2) An issuer who does not wish to list the securities on any market segment shall establish and maintain mechanisms approved by the Authority for facilitating trading and price discovery of the securities. Section 14(3) An issuer who has made a public offer in accordance with subsection (1) , may, after the expiry of one year since the securities ceased to be the subject of an offer to the public, list the securities by introduction.

Section 15. Transfer to newmarket segment Section 15(1) An issuer whose securities are listed on a market segment of a securities exchange shall not be eligible to transfer the listed securities to another market segment before the expiry of one year from the date of the first listing . Section 15(2)(a) be subjected to the eligibility criteria of the new segment; Section 15(2)(b) comply with the disclosure requirements of the new segment; and Section 15(2)(c) be subjected to the approval of the securities exchange:

Section 16. Dealing with additional issues of securities Section An issuer whose securities are listed at a securities exchange shall not issue, or authorize its share registrar to issue or register, by way of capitalization, scrip dividend, additional rights issue or additional shares of the class listed to a greater amount than the number authorized for listing except in accordance with the disclosure requirements for additional listing prescribed in the Twelfth Schedule.

Section 17. Private offers Section 17(1)(a) the securities are offered to not more than one hundred persons who are specifically identified and the offer shall remain open for a continuous period not exceeding twelve months, and the offer shall not be repeated with wholly or partially different persons by the same entities or related parties, or ultimately for a common purpose, within a period of twenty-four months from the date of the first offer ; Section 17(1)(b) the securities are offered to the members of a club or association (whether or not incorporated) by or on behalf of that club or association, and the members can reasonably be regarded as having a common interest with each other and the club or association in its affairs and in what is to be done with the proceeds of the offer : Section 17(1)(c) the securities are offered in connection with a valid invitation to enter into an underwriting agreement with respect to the securities; Section 17(1)(d) shareholders or employees of the company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") ; or Section 17(1)(d)(i) shareholders or employees of the company ("a limited l...

Section 37. Issuing of shelf prospectuses Section 37(1) An issuer who satisfies the criteria set out in regulation 38 may submit to the Authority a shelf prospectus for approval which shall indicate a period not exceeding two years as the period of validity of such prospectus commencing on the date of opening of the first offer of securities under the prospectus and, in respect of a second or subsequent offer of such securities issued during the period of validity of the prospectus, no further prospectus shall be required. Section 37(2) An issuer who has submitted a shelf prospectus under subregulation (1) shall be required to publish a supplementary offering note containing all material changes in the business and financial position of the issuer occurring between the first offer of securities or the previous offer of securities and the succeeding offer of securities and such other changes as may be prescribed, within the prescribed time, prior to the issue of a second or subsequent offer of securities under the shelf prospectus: Provided that where an issuer or any other person has received an application for the allotment of securities and advance payments of subscription before...

Section 38. Qualification to issue shelf prospectuses Section 38(1)(a) that has net assets of at least five hundred million shillings as at the date of the last audited balance sheet; Section 38(1)(b) that has a consistent track record of distributable profit for the preceding three years; Section 38(1)(c) that has no regulatory action pending against it before any regulatory authority including the Authority, Central Bank of Kenya or Insurance Regulatory Authority ; and Section 38(1)(d) that is not in default of any material obligation including the payment of debts as they fall due and payment of dividends or repayment of any loans, and has not been in such default in the preceding three financial years. Section 38(2) Each shelf prospectus shall comply with the disclosure requirements for public offers of securities for the relevant market segment under these Regulations. Section 38(3) Not more than five issuances of securities may be made through a single shelf prospectus.

Section 18. Requirement for information memorandum Section 18(1) A person shall not make an offer of securities to the public unless that person publishes an information memorandum in respect of the offer approved by the Authority or by a securities exchange in exercise of delegated authority. Section 18(2) The issuer shall comply with any requirements of any law, including the Companies Act ( Cap. 486 ), regarding the registration of an information memorandum. Section 18(3) The issuer shall, during the offer period and for such additional period as may be prescribed by the Authority, make the information memorandum available to the public or to the section of the public to whom the offer is made free of charge. Section 18(4)(a) publishes the information memorandum on its official website; Section 18(4)(b) publishes the information memorandum in a newspaper with a nation-wide circulation; Section 18(4)(c) delivers the information memorandum to the respective electronic mail addresses of the offerees; Section 18(4)(d) publishes the information memorandum in such other digital platform as may be approved by the Authority; or Section 18(4)(e) publishes the information memorandum in an...

Section 19. Content of information memorandum Section 19(1)(a) a reporting accountant ’s report confirming that the issuer has complied with the financial disclosures prescribed under these Regulations with respect to the relevant market segment : Section 19(1)(b) the legal status of the issuer ; Section 19(1)(b)(i) the legal status of the issuer ; Section 19(1)(b)(ii) whether all licences and consents required to carry on the business or proposed business of the issuer have been duly obtained; Section 19(1)(b)(iii) the validity of evidence of ownership of land, plant and equipment and other important and relevant assets of the issuer ; Section 19(1)(b)(iv) any agreements or contracts regarding the proposed issue of securities including underwriting contracts or contracts with any securities exchange, registrar and trustees of bonds, debentures or other credit securities; Section 19(1)(b)(v) any material litigation, prosecution or other civil or criminal legal action in which the issuer or any directors of the issuer is involved; Section 19(1)(b)(vi) any contracts which have a material impact on the issuer ’s business and the public offer and listing of the issuer ’s securities; Se...

Section 20. Signing of information memorandum Section 20(1)(a) where an issuer which is a corporation, by each director or equivalent person of the issuer and each person who is named in the information memorandum as a proposed director or an equivalent person of the issuer ; Section 20(1)(b) where the issuer is the Government, state corporation or an entity duly established in Kenya by an official of the Government, state corporation or duly established entity who are duly authorized to sign the information memorandum; or Section 20(1)(c) where the person making the offer is an individual but is not the issuer , by that person. Section 20(2) The information memorandum shall be published in the English language.

Section 21. Electronic offers Section 21(1) An issuer may, when obtaining approval of an offer , notify the Authority, and, where applicable, the securities exchange, that the offer shall be made electronically and include that fact in the information memorandum. Section 21(2) The Authority may approve an electronic offering if satisfied that the technology to be used for such offer affords sufficient opportunity for each application to be treated fairly or equitably. Section 21(3) The issuer in an electronic offer shall ensure that the information memorandum is disclosed in the same form and content approved by the Authority. Section 21(4) The results of an electronic offer shall be published in the same manner as the information memorandum was published.

Section 22. Allocation policy Section 22(1) An issuer of securities shall establish and disclose in the information memorandum a fair and equitable allocation policy for the allocation of the securities in a public offer . Section 22(2) An issuer of securities shall establish mechanisms for sensitization of investors to invest in the issue of the issuer ’s securities. Section 22(3) An issuer shall notify the Authority and, where there is a listing , the securities exchange at least twenty-four hours before the publication of the result of the offer .

Section 23. Form and content of information memorandum Section 23(1)(a) Sixth Schedule, where the issuer seeks to raise capital and list in the Main Investment Market Segment ; Section 23(1)(b) Seventh Schedule, where the issuer seeks to list on the Main Investment Market Segment by way of introduction; Section 23(1)(c) Eighth Schedule, where the issuer seeks to list and raise capital on the Small and Medium Enterprises Market Segment ; Section 23(1)(d) Ninth Schedule, where the issuer seeks to list on the Small and Medium Enterprises Market Segment by introduction; Section 23(1)(e) Tenth Schedule, where the issuer seeks to list in the Main Fixed Income Securities Market Segment ; Section 23(1)(f) Eleventh Schedule, where the issuer seeks to list securities on the Small and Medium Enterprises Fixed Income Securities Market Segment; and Section 23(1)(g) such other requirements as the Authority may prescribe or approve with respect to any other market segment or issue of securities for which the Authority has jurisdiction. Section 23(2) Despite subregulation (1) , the Authority may prescribe different disclosure requirements for an entity listed on a foreign securities exchange recog...

Section 24. Additional information in an information memorandum Section 24(1)(a) the assets, liabilities, financial position, profits, losses and prospects of the issuer of the securities; and Section 24(1)(b) the rights attaching to the securities being offered. Section 24(2) The additional information under subregulation (1) shall be such information as is within the knowledge of any person responsible for the information memorandum or which it would be reasonable for him or her to obtain by making diligent enquiries. Section 24(3) In determining what information is required to be included in an information memorandum under this regulation, regard shall be had to the nature of the securities and offeror of the securities. Section 24(4) The Authority and securities exchange may require additional information to be included in an information memorandum if it is in the interests of investors for such information to be in the information memorandum.

Section 25. Supplementary information memorandum Section 25(1)(a) there is a significant change that affects any matter contained in the information memorandum the inclusion of which was required by these Regulations; Section 25(1)(b) a significant new matter arises the inclusion of information in respect of which would have been so required if it had arisen when the information memorandum was first prepared; or Section 25(1)(c) a significant inaccuracy in the information memorandum, is discovered, Section 25(2) Where a supplementary information memorandum in respect of a public offer has been approved, these Regulations shall have effect as if any reference to an information memorandum is a reference to the information memorandum originally published and that supplementary information memorandum , taken together. Section 25(3) The provisions of regulation 28 shall apply to a supplementary information memorandum .

Section 26. Change of basis of approval Section to issue a supplementary information memorandum disclosing such additional information;

Section 27. Omission of certain information Section The Authority may, upon application by the issuer , authorize the omission from an information memorandum of information whose inclusion would otherwise be required by these Regulations if the Authority considers that the disclosure of that information would be prejudicial to the interest of the offeror, but its omission does not prejudice the interest of investors.

Section 28. Abridged information memorandum Section 28(1) An advertisement, notice, poster or document including an abridged information memorandum announcing a public offer or listing of securities for which an information memorandum is or will be required under these Regulations shall not be issued to or caused to be issued to the public in Kenya unless it states that an information memorandum is or will be published and provides a website or other electronic location or an address in Kenya where the information memorandum can be obtained. Section 28(2) An advertisement, notice, poster or document referred to in subregulation (1) shall be submitted to the Authority and securities exchange not later than forty-eight hours before the proposed publication, and the Authority or securities exchange may require such amendments to be made to the information memorandum as may be necessary. Section 28(3) Each application form for subscription of the securities offered in an information memorandum shall state, in a conspicuous position, where the information memorandum may be obtained, and the issuer shall disclose to the Authority the number, if applicable, of physical copies of the infor...

Section 29. Short form prospectus Section 29(1) A person who intends to make a restricted public offer shall submit a short-form prospectus to the Authority for approval. Section 29(2)(a) the name of issuer ; Section 29(2)(b) a summary of description of business; Section 29(2)(c) a summary of description of issue; Section 29(2)(d) a disclosure of documents incorporated by reference in relation to the financial affairs of the entity or any significant matter as required for a full prospectus; Section 29(2)(e) the number, price and type of securities; Section 29(2)(f) conditions of the issue, if any; Section 29(2)(g) a detailed schedule of use of the proceeds; Section 29(2)(h) a description of securities and rights thereto; Section 29(2)(i) completed and ongoing acquisitions in the preceding two years; Section 29(2)(j) a description of any underwriting arrangement and if the underwriter has any conflict of interest; Section 29(2)(k) any other material information ; and Section 29(2)(l) any other information that the Authority may direct.

Section 30. Information notice Section 30(1)(a) in the case of any issue or offer , other than a private offer , that may be exempted by the Authority from issuing an information memorandum or a short-form prospectus; or Section 30(1)(b) the maximum amount which may be raised under the offer of securities is five hundred million shillings or such other amounts as may be prescribed by the Authority; or Section 30(1)(b)(i) the maximum amount which may be raised under the offer of securities is five hundred million shillings or such other amounts as may be prescribed by the Authority; or Section 30(1)(b)(ii) the securities are denominated in such an amount or currency as the Authority may prescribe, Section 30(2) The information notice shall be in the form set out in the Fifteenth Schedule.

Section 31. Persons responsible for the information memorandum Section 31(1)(a) the issuer of the securities to which the information memorandum relates; Section 31(1)(b) where the issuer is a legal entity , each person who is a director or member of the relevant governing body of that legal entity at the time when the information memorandum is published; Section 31(1)(c) where the issuer is a legal entity , each person who has given consent to be named and is so named in the information memorandum as a director or member of the relevant governing body of that legal entity at the date of the information memorandum or at a specified time in the future; Section 31(1)(d) each person who accepts, and is stated in the information memorandum as having accepted, responsibility for any part of the information memorandum; Section 31(1)(e) the offeror of the securities, where the offeror is not the issuer ; Section 31(1)(f) where the offeror is a body corporate, but is not the issuer and whether or not making the offer in association with the issuer , each person who is a director or member of the governing body of that body corporate at the time when the information memorandum is published;...

Section 32. Transaction advisors Section 32(1) An entity proposing to offer securities to the public or list securities in any market segment shall appoint a transaction advisor . Section 32(2) A transaction advisor shall take all reasonable and effective measures to avoid or deal with any conflicts of interest that may arise in the discharge of the transaction advisor ’s duties. Section 32(3) A person is not eligible for appointment as a transaction advisor unless such a person is an investment bank or an investment adviser licenced by the Authority. Section 32(4) A transaction advisor appointed under subregulation (1) shall be responsible for ensuring that the offer of securities and listing is made in accordance with the Act and these Regulations.

Section 33. Compliance officers Section 33(1) An issuer shall, after the issuance or listing of the issuer ’s securities, appoint, engage or designate a person to be the issuer ’s compliance officer . Section 33(2)(a) support the issuer to comply with the Act, these Regulations and any relevant written law during the period that the issuer ’s securities are listed; Section 33(2)(b) review, before publication, all financial information announcements, and any other documentation to ensure that the announcements or documentation accurately disclose all material information to shareholders and the market; Section 33(2)(c) submit all required documents to the securities exchange and ensure that the documents comply with the continuing disclosure obligations; Section 33(2)(d) take all reasonable steps to brief the members of the board of directors of the issuer as to the nature of the directors’ responsibilities under the continuing disclosure obligations, other applicable regulations and general nature of the directors’ obligations in relation to holders of securities; Section 33(2)(e) ensure that all new appointments to the board of directors of the issuer are complete; Section 33(2)(f...

Section 34. Underwriting of offers to the public Section 34(1) Where an issuer decides to have its public offer underwritten, it shall disclose the underwriting arrangement to the Authority before entering into the arrangement. Section 34(2) The issuer shall disclose the facts and particulars of the underwriting arrangement in the information memorandum. Section 34(3) Where the underwriter is a person related or associated with the issuer , the underwriter shall undertake to the Authority to dispose of any securities arising from the underwriting agreement within a period determined by the issuer and approved by the Authority. Section 34(4) The Authority may extend the period referred to in subregulation (3) if such extension is in the best interest of the holders of the securities of the issuer , having regard to the prevailing market conditions and any other factors that are relevant in the circumstances. Section 34(5) Where the Authority extends the period in accordance with subregulation (4) , the issuer shall publicly disclose the period of such extension, any conditions attached to the extension and the circumstances necessitating the extension, in the same manner as the info...

Section 35. Valuation of securities Section 35(1) A person who proposes to make a public offer may use a book-building process in accordance with the Sixteenth Schedule to determine the price of the securities. Section 35(2) Despite subregulation (1) , a person who proposes to make a public offer may also determine the price of the securities in accordance with International Valuation Standards. Section 35(3) The issuer shall disclose to the Authority the valuation methodology used to determine the price of securities in a public offer at the time of the application to the Authority to issue the securities.

Section 36. Green Shoe options Section 36(1)(a) the issuer has been authorized to include the green shoe option by a resolution passed in a duly constituted meeting of members of the issuer , which resolution shall specify the purpose for the green shoe option ; Section 36(1)(b) the maximum number of securities, in number and as a percentage of the proposed issue size, proposed to be over-allotted by the issuer ; Section 36(1)(b)(i) the maximum number of securities, in number and as a percentage of the proposed issue size, proposed to be over-allotted by the issuer ; Section 36(1)(b)(ii) the maximum increase in the equity share capital of the issuer and the shareholding pattern, post-issue, in case the issuer is required to allot further equity shares to the extent of over-allotment in the issue; Section 36(1)(b)(iii) the maximum amount of funds to be received by the issuer in case of further allotment, and the use of the additional funds shall be disclosed in the offer document; Section 36(1)(b)(iv) the name of the stabilizing agent; Section 36(1)(b)(v) the period for which the issuer proposes to avail of the stabilization mechanism; Section 36(1)(b)(vi) the details of the agreeme...

Section 39. Incorporation status Section 39(1) The special purpose acquisition company that intends to be listed shall be a body corporate that is duly incorporated or registered under the Laws of Kenya. Section 39(2) A special purpose acquisition company shall not carry on any commercial or business operation before applying to the securities exchange for listing .

Section 40. Qualitative and Quantitative criteria Section 40(1) An issuer applying for listing of its equity securities on the Main Investment Market Segment or Small and Medium Enterprises Market Segment must be suitable for listing and is not permitted to adopt a dual class share structure at an initial public offer . Section 40(2)(a) the business objective and strategy of the issuer ; Section 40(2)(b) the profile including the track record and repute of the founding shareholders, and experience and expertise of the management team of the issuer ; Section 40(2)(c) the alignment of interests of the founding shareholders and management team with the interests of other shareholders, including potential losses and returns to the founding shareholders and the management team, and other shareholders; Section 40(2)(d) enable the issuer to have an identifiable core business with sufficient size and scale; and Section 40(2)(d)(i) enable the issuer to have an identifiable core business with sufficient size and scale; and Section 40(2)(d)(ii) offer reasonable returns to shareholders based on the equity capital employed; Section 40(2)(e) the proportion of rewards to be enjoyed by the foundin...

Section 41. Special purpose acquisitioncompanyinitial public offering proceeds and escrow requirements Section 41(1) The issuer shall, immediately upon listing on the securities exchange, place at least ninety per cent of the gross funds raised from the initial public offer in an escrow account opened with and operated by an independent escrow agent and which is part of a financial institution licensed and approved by the Central Bank. Section 41(2) The amount placed in the escrow account under subregulation (1) shall not be drawn down except for the purpose of the business combination , or liquidation of the issuer , or such other circumstances as specified in these Regulations. Section 41(3) The escrow agent appointed under subregulation (1) shall be independent of the founding shareholders, management team, and associates of the founding shareholders and management team. Section 41(4) The issuer shall secure and maintain the escrow arrangement at all times over the funds in the escrow account until the termination of the escrow account in accordance with subregulation (6) . Section 41(5) The issuer shall hold its assets in permitted investments until completion of a business com...

Section 42. Issuer of convertible securities Section only one class of convertible securities shall be permitted at a time;

Section 43. Authority may permitissuerto raise additional funds Section 43(1)(a) the issuance is made on a pro rata basis and in accordance with the requirements of this Part; Section 43(1)(b) at least ninety per cent of the gross proceeds raised are placed in escrow; and Section 43(1)(c) the proceeds raised are for the purpose of financing the business combination or related administrative expenses: Section 43(2)(a) funds in the escrow account shall not be used as collateral or subject to encumbrance for the debt financing; and Section 43(2)(b) funds drawn down from the debt financing shall be applied towards the financing of the business combination or related expenses. Section 43(3) A credit facility may be entered into before the completion of a business combination and, if so entered into, shall be drawn down simultaneously with, or after completion of, a business combination . Section 43(4) For the purposes of this regulation, “debt financing” does not include short term trade or accounts payables in the ordinary course of business.

Section 44. Security-based compensation arrangements not permitted Section The Authority shall not permit the issuer to adopt any security-based compensation arrangement prior to the completion of a business combination .

Section 45. Additional continuinglistingrequirements before completion ofbusiness combination Section 45(1) The issuer shall be required to complete a business combination within twenty-four months from the date of listing of the special purpose acquisition company initial public offering. Section 45(2) Where the business combination comprises of more than one acquisition, the issuer shall be required to complete the acquisitions simultaneously on or around the same day, and each of the acquisitions shall be in separate and inter-conditional resolutions. Section 45(3) A business combination under this regulation may be in the form of a merger, share exchange, asset acquisition, share purchase, reorganization, or such other similar business combination , in accordance with the business strategy and acquisition mandate disclosed in the prospectus issued in relation to the special purpose acquisition company initial public offer . Section 45(4) The issuer may apply to the Authority for an extension of time, which may not exceed twelve months, to complete the business combination and specifically obtain the approval of a majority of at least seventy-five per cent of the votes cast by i...

Section 46. Multiple concurrent acquisitions or mergers Section Where the special purpose acquisition company concludes multiple concurrent acquisitions or mergers as part of the business combination , there must be at least one initial acquisition which satisfies the requirement of having a fair market value constituting at least eighty per cent of the amount held in the escrow account at the time of entry into the binding agreements for the business combination transactions, and such concurrent transactions must be inter-conditional and completed simultaneously within the permitted time frame.

Section 47. Issuer to appoint advisors and valuers Section 47(1)(a) a transaction advisor , who is an issue manager, to advise on the business combination ; and Section 47(1)(b) a competent and independent valuer to value the business or asset to be acquired under the business combination . Section 47(2) A valuation under subregulation (10)(b) shall be conducted in accordance with International Valuation Standards and a summary valuation report shall be included in the shareholders’ circular ("an information document issued to holders of listed securities in connection with proposed corporate action or transaction;") in relation to the business combination .

Section 48. Business combination to result in identifiable core business Section 48(1) The business combination shall result in the issuer having an identifiable core business of which it has a majority ownership or management control. Section 48(2) The Authority may consider a business combination involving an acquisition of a minority stake in the business or asset, where the issuer can demonstrate that it has management control of such business or asset. Section 48(3) The business combination must be respectively approved by a majority of independent directors, and an ordinary resolution passed by independent shareholders at a general meeting to be convened. Section 48(4) For the purpose of voting on the business combination under subregulation (3) , the founding shareholders, management team, and their associates, shall not considered to be independent of each other. Section 48(5) The shareholders’ circular ("an information document issued to holders of listed securities in connection with proposed corporate action or transaction;") in relation to the business combination must contain an opinion from an independent financial adviser stating that the terms of the transaction are...

Section 49. Business combinations Section 49(1) Before completion of the business combination , in the event a material change occurs in relation to the profile of the founding shareholders or the management team which may be critical to the successful founding of the issuer or successful completion of the business combination , the issuer shall seek approval of a majority of at least seventy-five per cent of the votes cast by independent shareholders at a general meeting to be convened for the continued listing of the issuer on the Securities Exchange. Section 49(2) For the purpose of voting on the continued listing of the issuer under subregulation (1) , the founding shareholders, management team, and their associates, shall not be considered to be independent of each other. Section 49(3) The Authority may declare a circumstance to be a material change under this regulation. Section 49(4)(a) fails to complete a business combination within the permitted time frame; Section 49(4)(b) fails to obtain specific shareholders’ approval; or Section 49(4)(c) is directed to delist by the Authority before the completion of a business combination . Section 49(5) The amount held in the escrow...

Section 50. Liquidation of special purpose acquisition companies Section complete a business combination within the permitted time frame; or