Capital Markets Committee
SIFMA GUIDANCE FOR CHAPERONING JOINT DUE DILIGENCE BY SETTLEMENT FIRMS
In October 2003, the SEC, the New York State Attorney General and several other securities regulators settled various enforcement actions against a number of financial institutions relating to their practices regarding their research analysts, research reports and investment banking personnel. The settling financial institutions agreed to pay monetary damages and comply with the provisions of “Addendum A” to the settlement agreement, which contained significant structural, operational and other institutional reforms and undertakings. Modifications to Addendum A were approved by Judge William H. Pauley III of the Southern District of New York on March 15, 2010 (the “March 2010 Modifications” and, Addendum A as modified as a result thereof, the “Order”). Most significantly, the Order now permits joint due diligence sessions with simultaneous involvement of research analysts and investment banking personnel under certain limited circumstances, including where the session is chaperoned by counsel who is knowledgeable regarding the terms of the Order and conflicts of interest between equity research and investment banking.
SIFMA’s Capital Markets Committee with the assistance of the law firm of Davis Polk & Wardell LLP has developed guidance for chaperoning counsel. The relevant documents include a Key Global Settlement Principles document, a Record Keeping Instructions document and a form of Chaperoning Cover Letter.
Advance Conflict Waiver Form Language
Effective April 1, 2009 the New York State Unified Court System published an updated Part 1200- Rules of Professional Conduct. Under the updated Rules, Rule 1.7 b (4) requires that consents regarding potential conflicts of interest be confirmed in writing. Several leading law firms have expressed interest in developing language for an advanced blanket conflict waiver to facilitate the documentation requirement for routine conflicts for longstanding clients. Member firms of SIFMA's Capital Markets Committee have worked with these firms to create a form of advance conflict waiver that may be used as a point of reference for further discussion between each individual law firm and its clients. The form is intended to reflect how business is normally conducted and provides for law firm clients to opt out at any time. Click here to access the form language for such advance conflict waiver. Questions on the waiver can be directed to Sean Davy at 212-313-1118 or sdavy@sifma.org
Amended Rule 105 Of Regulation M -- pdf, Important Information For Persons Seeking Allocations Of Public Offering Securities
Block Trade Guidelines - pdf, posted March 31, 2008
The SIFMA Capital Markets Committee is focused on regulatory and legislative proposals that impact corporate finance or capital markets activities of member firms, including underwriting, syndication, merger and acquisition activity and research. Committee initiatives include:
- Block Trade Guidelines
- US Competitiveness Reports with Focus on Reforms to the Underwriting
- Auditor Due Diligence
- Rule 176 Underwriter Liability
- Private Offering Process Liberalization
- IPO Allocation and Pricing
- Conflicts of Interest in Public Offerings
- Fairness Opinions
- Shelf Registration Proposals
