<p><img src="https://static4.businessinsider.com/image/603f5877b46d720018b04842-2400/GettyImages-1229781523.jpg" border="0" alt="GettyImages 1229781523" data-mce-source="Tolga Akmen/Getty Images" data-mce-caption="The City of London has fallen behind New York and Amsterdam on SPACs"></p><p></p><bi-shortcode id="summary-shortcode" data-type="summary-shortcode" class="mceNonEditable" contenteditable="false">Summary List Placement</bi-shortcode><ul class="summary-list"><li>A major review has recommended an overhaul of London's rules to welcome SPACs.</li><li>The UK has lagged far behind the US, and major players are eyeing Amsterdam as Europe's hub.</li><li>The British government wants to show the benefits of leaving the EU.</li><li id="recirc"><strong><a href="https://newsletter.businessinsider.com/join/4np/10-things-opening-bell&hash=8122c716833601fc1471f79af063b104'utm_source=markets&utm_medium=ingest'utm_source=markets&utm_medium=ingest'utm_source=markets&utm_medium=ingest'utm_source=markets&utm_medium=ingest'utm_source=markets&utm_medium=ingest'utm_source=markets&utm_medium=ingest'utm_source=markets&utm_medium=ingest'utm_source=markets&utm_medium=ingest'utm_source=markets&utm_medium=ingest'utm_source=markets&utm_medium=ingest'utm_source=markets&utm_medium=ingest" target="_blank" rel="noopener">Sign up here for our daily newsletter, 10 Things Before the Opening Bell</a>.</strong></li></ul><p>After falling behind New York and even Amsterdam, London is eyeing a major overhaul of its stock-listing rules so it can cash in on the boom in SPACs and reassert its financial power after Brexit.</p><p>A <a href="https://www.gov.uk/government/publications/uk-listings-review">major review</a> into the City of London has recommended the removal of a rule that currently deters special-purpose acquisition companies from listing in the UK's financial hub.</p><p>SPACs have continued to boom in 2021, with around 180 so-called blank-check companies listing in the US already, raising more than $50 billion. The City has also lost out on share-trading to Amsterdam after Brexit, and many investors are now looking to the Netherlands as the <a href="https://markets.businessinsider.com/news/stocks/bernard-arnault-spac-boom-europe-blank-check-companies-2021-2-1030083125">future center of SPACs in Europe.</a></p><p>A <a href="https://www.businessinsider.com/what-is-a-spac'utm_source=markets&utm_medium=ingest">SPAC</a> is an entity that exists solely to list on the stock exchange to raise money, in the hope of finding and merging with a target company to take it public. It can be extremely lucrative for the people who set up the SPAC, and can be an easier way for a company to go public than via a direct listing, or initial public offering.</p><p>But London has been almost completely left out of SPAC-mania. This is in part due to a rule that says shares in the company must be suspended after it picks a target, which can leave investors with their cash locked up, even if they want to sell.</p><p>The report recommended the UK's financial authority remove this rule "and replace it with appropriate rules and guidance further to increase investor confidence in these companies."</p><p>Lord Hill, a former EU financial commissioner who chaired the review, said London needed to work on "closing a gap which has already opened up" between it and other global financial hubs.</p><p>Amsterdam is emerging as something of a SPAC center, with LVMH boss <a href="https://markets.businessinsider.com/news/stocks/bernard-arnault-spac-boom-europe-blank-check-companies-2021-2-1030083125">Bernard Arnault backing a vehicle</a> that plans to list there. A former Commerzbank chief is also weighing a Netherlands listing, <a href="https://www.bloomberg.com/news/articles/2021-02-05/ex-commerzbank-ceo-martin-blessing-is-said-to-plan-europe-spac">according to Bloomberg</a>.</p><p>The review expressed concerns that some of the UK's fastest-growing companies could be poached by foreign SPACs and listed abroad.</p><p>Chancellor Rishi Sunak said: "The UK is one of the best places in the world to start, grow and list a businessand we're determined to enhance this reputation now we've left the EU."</p><p>UK Finance, the UK's banking lobby group, said the proposals should "foster a more dynamic regulatory regime fit for the 21st century and the fast-growing innovative companies choosing to list in the UK."</p><p>The Hill review expressed some concerns about SPACs, including the way they are skewed towards <a href="https://www.businessinsider.com/hedge-funds-spac-acquisition-merger-retail-investors-slam-cciv-warrants-2021-3">big payouts to "sponsors"</a> as well as concerns about their performance over time.</p><p>Yet it said competitive pressures and the benefits of the model meant rule changes should be considered.</p><p><a href="https://markets.businessinsider.com/news/stocks/spacs-london-rule-changes-boom-amsterdam-brexit-new-york-2021-3-1030144217#comments">Join the conversation about this story »</a></p> <p>NOW WATCH: <a href="https://www.businessinsider.com/what-if-jump-off-international-space-station-2018-6">What would happen if you jumped off the International Space Station</a></p>
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