Directors and officers liability insurance policyholders and insurers are waiting to see what the U.S. Securities and Exchange Commission will do about SPACs, reports Business Insurance.
Although the agency has taken only two SPAC-related enforcement actions so far, SEC Chair Gary Gensler has been outspoken about his concerns over investor protections.
Accounting guidance the agency issued in April 2021 stating SPAC warrants should be classified as liabilities instead of equity instruments led to a dramatic drop in the number of SPAC IPOs.
If the SEC becomes more aggressive, as it has signaled it intends, it could impact D&O underwriters’ willingness to participate in the SPAC market. Read more.
