IOSCO published the final report that sets out guidance to help its members address conflicts of interest and associated misconduct risks that may arise and undermine the equity capital raising process. The guidance is intended to help regulators identify and address these risks.
The report details the key stages of equity capital raising where the role of intermediaries might give rise to conflicts of interest that compromise the integrity and efficiency of the process. The guidance sets standards of conduct for market intermediaries in the equity capital raising process and it comprises eight measures that address the following:
- Conflicts of interest and pressure on analysts during the formation of their views on an issuer in the pre-offering phase of a capital raising
- Conflicts of interest during the allocation of securities
- Conflicts of interest and conduct risks in the pricing of securities offerings
- Conflicts of interest and conduct risks stemming from personal transactions by staff employed within firms managing a securities offering
This report is the first stage of the work of IOSCO to examine the conflicts of interest and associated conduct risks in the capital raising process. The second phase will consider the conflicts of interest and associated conduct risks during the debt capital raising process. It is believed that conflicts of interest and associated conduct risks stemming from the role of intermediaries can harm the integrity and efficiency of the equity capital raising process, damage investor confidence, and weaken capital markets as an effective vehicle for issuers to raise funding.
Keywords: International, Banking, Securities, Guidance, Misconduct Risk, Conflicts of Interest, Equity Capital Raising Process, IOSCO
Previous ArticleOCC Seeks to Renew Information Collection on Stress Testing Guidance
The Bank of England (BoE) published a consultation paper on approach to setting minimum requirement for own funds and eligible liabilities (MREL), an operational guide on executing bail-in, and a statement from the Deputy Governor Dave Ramsden.
The European Banking Authority (EBA) is seeking preliminary input on standardization of the proportionality assessment methodology for credit institutions and investment firms.
Certain regulatory authorities in the US are extending period for completion of the review of certain residential mortgage provisions and for publication of notice disclosing the determination of this review until December 20, 2021.
The Prudential Regulation Authority (PRA) published the policy statement PS18/21, which introduces an amendment in the definition of "higher paid material risk taker" in the Remuneration Part of the PRA Rulebook.
The European Banking Authority (EBA) published its annual report on asset encumbrance in banking sector.
The European Banking Authority (EBA) published a methodological guide to mystery shopping.
The Australian Prudential Regulation Authority (APRA) released a letter to authorized deposit-taking institutions to provide an update on key policy settings for the capital framework reforms, which will come into effect from January 01, 2023.
The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) published a report that assesses the business continuity planning activities of financial market infrastructures or FMIs.
The Bank of England (BoE) published questions and answers (Q&A) on OSCA to BEEDS migration for statistical reporting as well a presentation from the project overview session held with statistical reporters.
The Basel Committee on Banking Supervision (BCBS) is consulting on a technical amendment to the Basel Framework to reflect a new process reviewing the global systemically important bank (G-SIB) assessment methodology.