IOSCO adopted guidance on mitigating conflicts of interest and conduct risks for market intermediaries in debt capital market transactions. The adopted recommendations on regulatory requirements are consistent with those set forth in the initial report. (See coverage here.)
The guidance also includes an additional recommendation for regulators in response to "concerns about behavior" that have arisen as a result of the COVID-19 pandemic. Among the current situations that IOSCO referred to as raising concern is a bank using a lending relationship with an issuer to pressure it into using the bank for future capital raising. IOSCO recommended that regulators consider mandating that firms (i) follow "proper standards of market conduct," (ii) "act with integrity," (iii) adequately address conflicts of interest, and (iv) "treat clients fairly" when raising debt finance.
Primary Sources
- IOSCO Press Release: IOSCO issues measures to reduce conflict of interests in debt capital raising
- IOSCO Final Report: Conflicts of interest and associated conduct risks during the debt capital raising process
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