Connect with us

Business

SPAC Boom faces new SEC threat with accounting crackdown

Avatar

Published

on


U.S. regulators are throwing another wrench into Wall Street’s SPAC machine by cracking down on how accounting rules apply to a key element of blank check companies.

The Securities and Exchange Commission presents new advice that warrants, which are issued to the first investors in transactions, may not be considered equity instruments and may instead be liabilities for accounting purposes. The move, reported earlier by Bloomberg News, threatens to disrupt the filings of new special purpose acquisition companies until the issue is resolved.

Accounting considerations mark the SEC’s latest effort to tackle the white-hot PPCS market. For months, the regulator has reported that investors are not fully informed of the potential risks associated with blank check companies, which go public to raise funds for the purpose of buying other entities.

See also: SEC Warns SPAC Are not a way around securities law

The SEC began contacting accountants last week with advice on the warrants, according to people familiar with the matter. A pipeline of hundreds of new PSPC filings could be affected, said the people, who asked not to be named because the conversations were private.

“The SEC has indicated that it will not report any actual registration statements unless the mandate issue is resolved,” according to a client memo sent by accountancy firm Marcum which was reviewed by Bloomberg.

In a SPAC, early investors buy units, which typically consist of a common share and a fraction of a warrant to buy more shares at a later date. They are viewed as a sweetener for supports and have so far been viewed as equity instruments for accounting purposes. Teams of sponsors – the leadership of a PSPC – typically receive warrants as part of their reward for reaching a deal, in addition to the founder’s actions.

In a statement Monday evening, SEC officials urged those involved in PSPCs to pay attention to the accounting implications of their transactions. They said a recent market analysis had shown a pattern of fact in transactions where “warrants should be classified as a liability measured at fair value, with changes in fair value at each period being recognized in the results”.

What Are The Main Benefits Of Comparing Car Insurance Quotes Online

LOS ANGELES, CA / ACCESSWIRE / June 24, 2020, / Compare-autoinsurance.Org has launched a new blog post that presents the main benefits of comparing multiple car insurance quotes. For more info and free online quotes, please visit https://compare-autoinsurance.Org/the-advantages-of-comparing-prices-with-car-insurance-quotes-online/ The modern society has numerous technological advantages. One important advantage is the speed at which information is sent and received. With the help of the internet, the shopping habits of many persons have drastically changed. The car insurance industry hasn't remained untouched by these changes. On the internet, drivers can compare insurance prices and find out which sellers have the best offers. View photos The advantages of comparing online car insurance quotes are the following: Online quotes can be obtained from anywhere and at any time. Unlike physical insurance agencies, websites don't have a specific schedule and they are available at any time. Drivers that have busy working schedules, can compare quotes from anywhere and at any time, even at midnight. Multiple choices. Almost all insurance providers, no matter if they are well-known brands or just local insurers, have an online presence. Online quotes will allow policyholders the chance to discover multiple insurance companies and check their prices. Drivers are no longer required to get quotes from just a few known insurance companies. Also, local and regional insurers can provide lower insurance rates for the same services. Accurate insurance estimates. Online quotes can only be accurate if the customers provide accurate and real info about their car models and driving history. Lying about past driving incidents can make the price estimates to be lower, but when dealing with an insurance company lying to them is useless. Usually, insurance companies will do research about a potential customer before granting him coverage. Online quotes can be sorted easily. Although drivers are recommended to not choose a policy just based on its price, drivers can easily sort quotes by insurance price. Using brokerage websites will allow drivers to get quotes from multiple insurers, thus making the comparison faster and easier. For additional info, money-saving tips, and free car insurance quotes, visit https://compare-autoinsurance.Org/ Compare-autoinsurance.Org is an online provider of life, home, health, and auto insurance quotes. This website is unique because it does not simply stick to one kind of insurance provider, but brings the clients the best deals from many different online insurance carriers. In this way, clients have access to offers from multiple carriers all in one place: this website. On this site, customers have access to quotes for insurance plans from various agencies, such as local or nationwide agencies, brand names insurance companies, etc. "Online quotes can easily help drivers obtain better car insurance deals. All they have to do is to complete an online form with accurate and real info, then compare prices", said Russell Rabichev, Marketing Director of Internet Marketing Company. CONTACT: Company Name: Internet Marketing CompanyPerson for contact Name: Gurgu CPhone Number: (818) 359-3898Email: [email protected]: https://compare-autoinsurance.Org/ SOURCE: Compare-autoinsurance.Org View source version on accesswire.Com:https://www.Accesswire.Com/595055/What-Are-The-Main-Benefits-Of-Comparing-Car-Insurance-Quotes-Online View photos



picture credit

ExBUlletin

to request, modification Contact us at Here or [email protected]