IOSCO Guidance Addresses Conflicts of Interest and Conduct Risks in Equity Capital Raising

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Monday, September 17, 2018 / 12:45 PM / IOSCO 

The Board of the International Organization of Securities Commissions (IOSCO) today published guidance to help its members address conflicts of interest and associated misconduct risks that may arise and undermine the equity capital raising process.  

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. To help regulators identify and address these risks, IOSCO today published the final report on Conflicts of interest and associated conduct risks during the equity capital raising process, which sets out guidance for regulators to address conflicts of interests that may occur when intermediaries manage an equity securities offering.  


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 comprises eight measures that address:

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.
  • The guidance sets standards of conduct  for market intermediaries in the equity capital raising process.


Implementation of the guidance is expected to materially improve the equity raising process, which includes enhancing:

  • the range and quality of timely information that is made available to investors during the process;
  • the transparency of allocations;
  • the efficiency and integrity of the overall process, boosting investor confidence and rendering capital markets a more effective channel to raise financing. 
  • The report published today is the first stage of IOSCO´s work to examine conflicts of interest and associated conduct risks in the capital raising process. The second phase will consider conflicts of interest and associated conduct risks during the debt capital raising process.



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