Does trading in a SPAC's shares stop when it announces a merger?

Yes. Where a preliminary review of the merger listing is required, such as a merger with an unlisted company, the exchange suspends trading in the SPAC's shares from the time the merger resolution is disclosed until the date the preliminary review result is notified.

This is to prevent sharp price swings and unfair trading such as insider trading during the review period. If an ineligibility result is notified, the suspension continues until a resolution to abandon the merger is passed, and if the merger decision is withdrawn before the result is notified, trading resumes from the day after the withdrawal.