Conflicts of interest and associated conduct risks during the equity capital raising process
Guidance with measures that IOSCO encourages its members to consider in their regulation of market intermediaries in equity securities offerings. The Guidance provides eight measures, which are grouped by the relevant stage in the equity capital raising process. The measures address a specific conflict of interest or associated conduct risk:
conflicts of interest and pressures on analysts during the formation of their views on an issuer during the pre-offering phase of a capital raising,
conflicts of interest during the allocation of securities,
conflicts of interest in the pricing of equity securities offerings,
conflicts of interest and conduct risks stemming from personal transactions by staff employed within firms managing a securities offering.
When considering implementation of Measures 1-4, it may be relevant for IOSCO members to have regard to proportionality in the context of transactions for SMEs seeking to raise finance through equity capital markets. Members should also carefully consider the Guidance in the context of existing IOSCO Principles and associated implementing measures of relevance to the capital raising process.