February 21, 2018

IOSCO is consulting on a proposal on conflicts of interest and associated conduct risks during the equity capital raising process. The consultation report (CR02/2018) describes the key stages of the equity raising process where the role of intermediaries might give rise to conflicts of interest. The report requests public comments on the proposed guidance of IOSCO for tackling these issues. Comments should be submitted by April 04, 2018.

The proposed guidance of IOSCO comprises eight measures that are grouped according to the various stages in the capital raising process:

  • Guidance to address conflicts of interest and pressure on analysts during the formative, pre-offering phase of a capital raising
  • Guidance to address conflicts of interest during the allocation of securities
  • Guidance to address conflicts of interest in the pricing of securities offerings
  • Guidance to address conflicts of interest and conduct risks stemming from personal transactions by staff employed within firms managing a securities offering

IOSCO believes that the guidance could help enhance the range and quality of timely information available to investors during equity capital raising, improve the transparency of allocations, and increase the efficiency and integrity of the overall process. The guidance is designed to provide IOSCO members with a degree of flexibility on the domestic implementation of these measures, to ensure that these measures are appropriate for the legal and regulatory framework and for the specific risks arising in each jurisdiction.

 

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Keywords: International, Securities, Equity Capital Raising Process, Conflicts of Interest, Guidance, IOSCO

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