(Bloomberg) -- Global regulators are teaming up to explore how to regulate blank check company listings after the vehicles earlier this year became the hottest thing in finance before being hit by increased scrutiny and a surge in lawsuits from angry investors.

In total, 46 securities regulators joined the SPAC Network formed by the International Organization of Securities Commissions about a month ago to share information on special purpose acquisition companies.

The group is seeking to answer questions such as whether SPACs provide a useful alternative to initial public offerings and private equity, or whether they just exploit loopholes. It’s also looking at whether investors gain better valuations via SPACs and what kind of disclosures are needed.

The network is unlikely to come up with a unified approach, but regulators all share similar goals of improving the function of SPACs, while limiting the risk for investors, said Jean-Paul Servais, the chairman of the group, in an Aug. 27 phone interview.  

“Although there’s a big U.S. market, SPAC isn’t only an American story,” said Servais, who’s also chairman of the Belgium Financial Services and Markets Authority. “It’s a global story, with pros and cons, ups and downs. It’s still early days to judge which approach turns out to be the most appropriate.”

Companies have raised a total of $129 billion this year via SPACs worldwide, data compiled by Bloomberg show. Predominately a U.S.-centric market, interest has spread to other major financial centers. London has made listing SPACs easier and Singapore and Hong Kong will announce their own SPAC regimes before year end. Continental Europe is also catching up, with Amsterdam, Frankfurt and Paris becoming popular markets to list SPACs.

SPACs are shell companies that promise to buy another company with the money they attract. A record-breaking frenzy saw more than 500 SPACs reel in over $180 billion in the five quarters that ended March 31. But the pace has since abated with the U.S. Securities and Exchange Commission calling for more disclosures while a recent earnings bust validated some of the skepticism over SPACs. Class action suits against U.S. SPACs doubled in the first half of the year. 

Class action suits allow people who don’t know each other but have common interest  -- for instance being investors in the same company -- to enter a lawsuit as a group. While common and usually effective in the U.S., such a legal tool isn’t available in Hong Kong and most of continental Europe. 

Other measures, such as a robust corporate law, can work in the jurisdictions where class action laws are absent, Servais said. 

“I think personally a good mix of ex-post enforcement and preventive is an interesting approach,” Servais said. “It doesn’t mean that ex-post enforcement is, by definition, class action. There are other approaches. Everything is open.” 

The network, which includes Hong Kong and Singapore, will meet every month to discuss relevant issues around SPACs and possible measures. 

The timing was right for IOSCO to establish a network now to “learn some experience from the past, and how we can be ready for the future,” Servais said.

It will explore developing more formal information sharing mechanisms. The next steps forward will be considered toward the end of this year or early next year, he said.  

Typically, an IOSCO Network focuses on information sharing and capacity building. Relevant task forces could then be established and may even grow into standing committees if there is a consensus to push forward. IOSCO could issue formal guidance where appropriate to its more than 130 regulatory members overseeing 95% of securities market worldwide. The guidance would then be formed by local regulators on a national level.

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