IOSCO provided guidance to regulators regarding conflicts of interest and related misconduct risks that may emerge when market intermediaries manage an equity securities offering.
According to the IOSCO report, regulators should consider requiring firms to:
- take steps to prevent an analyst from taking a favorable view of the offering from an issuer's representative;
- proactively prevent an analyst's views and research on an equity securities offering from being influenced by the desire to conduct a successful offering;
- manage potential conduct risks, such as conflicts of interest, that may arise from a connected analyst's performance of an internal advisory role within the firm;
- encourage the timely provision of a range of information to investors in an equity securities offering;
- maintain an allocation policy, keep records of allocation decisions, and allow the issuer to be involved in the process;
- keep the issuer informed of key actions that can impact the pricing of the securities, and allow the issuer to be involved in pricing decisions; and
- take all reasonable steps to prevent employees who have access to confidential information regarding the issuer or the offering from entering into any personal transactions where such transactions would involve the misuse or impermissible disclosure of such information.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
