The Monetary Authority of Singapore (MAS) has published a consultation paper on Dec 15, that seeks to raise the standards of conduct of corporate finance advisers.
The paper, which introduces baseline requirements for the due diligence of work performed, will improve the quality of disclosures from entities seeking to raise funds from the public.
Corporate finance advisers are currently required to have internal controls to address the risks associated with their activities. They are also required to mitigate conflicts of interests that may arise from these activities.
In the paper, minimum standards are set out for corporate finance advisers to adhere to when conducting their due diligence on corporate finance transactions.
Under the proposal, the advisers will be required to “exercise reasonable judgement in determining the scope of the due diligence work to be performed on a corporate finance transaction”.
In addition, they will need to “assess the veracity of information obtained in the course of their due diligence” and “satisfy additional requirements such as assessing the suitability of listing the applicant and conducting an independent review of the due diligence performed by the team responsible for advising on a specific IPO”, says MAS.
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Lim Tuang Lee, assistant managing director (Capital Markets) at MAS, says, “Corporate finance advisers play an important gatekeeping role in safeguarding the integrity of our capital markets. The proposed requirements are consistent with best practices in major jurisdictions and seek to strengthen investor confidence in our capital markets.”
Photo: Bloomberg
