IOSCO issues measures to reduce conflict of interests in debt capital raising

The Board of the International Organisation of Securities Commissions (IOSCO) on Monday September 21 published final guidance to help its members address potential conflicts of interest and associated conduct risks market intermediaries may face during the debt capital raising process.

The guidance also seeks to address some specific concerns observed by certain regulators during the COVID-19 crisis that may affect the integrity of the capital raising process.

IOSCO is the leading international policy forum for securities regulators and is recognised as the global standard setter for securities regulation. The organization’s membership regulates more than 95percent of the world’s securities markets in more than 115 jurisdictions and it continues to expand.

Conflicts of interest and associated conduct risks can weaken investor confidence and undermine debt 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 debt capital raising process.

The report also explores the potential benefits and risks of Blockchain technology in addressing conflicts of interest in the debt capital raising process. The report describes the key stages of the debt raising process and identifies where the role of intermediaries might give rise to conflicts of interest.

The guidance comprises nine measures that address potential issues when issuers are preparing to raise debt finance, including such things as the use of risk management transactions, the quality of information available to investors, and the allocations process.