London Stock Exchange (LDNXF  ) CEO David Schwimmer is warning of excess speculation in the United States' SPAC market. Schwimmer's warning comes after a government review in the U.K. called for reforms to trading to allow British investors to benefit from SPACs as American traders do.

The SPAC craze that began in 2020 and continued into 2021has definitely been one for the record books. As I discussed in February, the SPAC craze has not only proven to be almost viral among investors, it's proving to be a financially lucrative means of going public, which makes it no surprise that SPACs are so popular. Like any trend, though, there is always a downside, and the first signs of "froth" and excess in the U.S. market are starting to show, according to Schwimmer.

"I'm not the first person to say this, but there is clearly some froth in the U.S. market for SPACs, and some of that could end poorly for some of those opportunities and those investors," Schwimmer said.

It's worth noting that Schwimmer is no enemy to SPACs, having previously noted their utility. Schwimmer's concerns appear to be mostly rooted in fear of excess.

"I think it is important to recognize that SPACs are a useful tool in the capital markets toolkit. They are one way of companies getting access to public markets in a way that is a little different from an initial public offering (IPO). Having said that, I think it is important [to recognize] that we see speculative cycles in markets over the years. But SPACs do have a role to play, and it is important investors and market participants use them thoughtfully and carefully."

While Schwimmer didn't actually identify any incidents of "froth" or excess directly, it's likely that his warning may also be towards U.K. investors as the country moves towards embracing SPAC regulation similar to that employed in New York. Schwimmer's comments come on the heels of a recent post-Brexit government commission that suggested numerous policy changes to make London more competitive against other exchanges, primarily New York. One significant adjustment is repealing a current regulation that requires trading at the LSE to be halted if a merger is announced, denying investors access to SPACs during a key window to execute trades.