March 2018 04.01PM / IOSCO/MR/04/2018
The Board of the International Organization
of Securities Commissions (IOSCO) today is proposing guidance to help its
members address conflicts of interest and associated misconduct risks that may
arise during the equity capital raising process.
Conflicts of interest and associated
conduct risks stemming from the role of intermediaries can threaten the
integrity and efficiency of equity capital raising, damage investor confidence
and undermine capital markets as an effective vehicle for issuers to raise
funding. To help regulators identify and address these issues, IOSCO has issued
today the consultation report Conflicts of
interest and associated conduct risks during the equity capital raising
The report describes the key stages of the
equity raising process where the role of intermediaries might give rise to
conflicts of interest, and it requests public comment on IOSCO´s proposed
guidance for tackling these issues. The guidance comprises eight measures that
are grouped according to the various stages in the capital raising process.
Each group of measures addresses the following specific conflicts of
to address conflicts of interest and pressure on analysts during the formative,
pre-offering phase of a capital raising;
to address conflicts of interest during the allocation of securities;
to address conflicts of interest in the pricing of securities offerings; and
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 made available to investors
during equity capital raising, improve the transparency of allocations, and
increase the efficiency and integrity of the overall process.
Responses to a survey of IOSCO members
indicated that while different jurisdictions share some common characteristics,
they tend to have different market practices and different legal and regulatory
frameworks governing the equity capital raising process. As a result, the
severity of the conflicts of interest and associated misconduct risks, and the
harm they can inflict, vary across jurisdictions. Consequently, the guidance is
designed to provide IOSCO members with a degree of flexibility over how they
implement the measures domestically, to ensure that these measures are
appropriate for the legal and regulatory framework and the specific risks
arising in each jurisdiction.
comments on the consultation paper on equity capital financing should be
submitted on or before 4 April 2018.
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