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Standard Documentation

AFMA provides access to a range of industry standard documentation for participants in Australia's financial markets.

CAPITAL RAISING AND ADVISORY

 

Capital Raising Standard Confidentiality Agreement

 

The desirability of a standard form confidentiality agreement for capital raising in Australia, which is ideally put in place between advisers and the clients in advance of settling other terms of their engagement so that the confidentiality obligations and potentially related issues such as conflicts of interest are in place at or near the start of a transaction, has been recognised by the Australian Securities and Investments Commission. To assist the market this Standard Form Capital Raising Confidentiality Agreement was developed by AFMA's Capital Raising Committee to guide the market with a standard set of terms.

Debt Capital Markets Documentation

 

The "Recommendations for Australian Wholesale Debt Capital Markets Documentation" helps members facilitate and standardise documentation for Australian wholesale debt capital market issues. It now includes an editable Terms Sheet for market participants to use.

Standard Form Arrangement Letter for International (excluding US) Debt Offers

 

In connection with the due diligence process for many international debt offers, accounting firms are requested to prepare a "comfort letter" addressed to the underwriters and the issuer's board of directors. Since 2003, certain accounting firms have sought comparable arrangement letters in connection with international debt offers by Australian Issuers and, in more recent years, have sought to broaden the scope of such letters. Because the negotiation of arrangement letters can consume undue amounts of time and expense (legal and accounting fees) in some transactions a Standard Form Arrangement Letter for International (excluding US) Debt Offers has been developed through consultation among major investment banks, major law firms and major accounting firms. This form is designed for use in connection with offers of debt securities by Australian issuers outside the United States.

Due Diligence Planning Memorandum

 

The AFMA Due Diligence Planning Memorandum (DDPM) is an industry standard due diligence process document designed for the offer of ordinary shares in an initial public offering (IPO) under an Australian law Corporations Act compliant prospectus. The document aims to assist issuers and their advisers by setting out a roadmap for the establishment of a due diligence committee and the implementation of a due diligence process for an IPO. However, ultimate responsibility rests with the issuer for the conduct of due diligence, sign-offs/reports and opinions provided by Reporting Persons, compliance with legal and regulatory disclosure requirements and the possible availability of due diligence defences.

Master Equity Capital Market Terms

 

The Master Equity Capital Market (ECM) Terms provide industry developed standard terms to streamline the confirmation of institutional allocations on capital raisings in Australia.

 

The Master ECM Terms were developed by the AFMA ECM Legal Committee and first published in 2010 to provide a simple and effective means of confirming institutional allocations on equity capital raisings. Since that time they have become very widely accepted as the industry standard. AFMA is confident that the Master ECM Terms will benefit clients, institutional investors and joint lead managers through streamlining and simplifying the confirmation of allocation process, resulting in time and cost savings.

 

AFMA member firms which collaborated in the development of the terms were Macquarie Capital Advisers, RBS, Bank of America Merrill Lynch, Commonwealth Bank, Credit Suisse, Deutsche Bank, Goldman Sachs, JP Morgan Chase Bank, Macquarie Group Limited, UBS, with support from the law firms Allens, Baker & McKenzie, Ashurst, Clayton Utz, Herbert Smith Freehills, King & Wood Mallesons, Sidley Austin, Skadden, Arps, Slate, Meagher & Flom and Sullivan & Cromwell. The ECM Legal Committee maintains the Terms with a regular six month review process and the Terms are updated as required to take account of developments in the law.

 

Archived versions of the Master ECM Terms are available for download here.

Information for Issuers on IPO transactions

 

The Australian Securities and Investments Commission (ASIC) has published Regulatory Guide 264 (Sell Side Research) (RG 264) which provides ASIC's guidance on its expectations as to how Australian Financial Service Licensees, should manage certain potential conflicts of interest situations and handle inside information as it relates to research analysts and sell-side research.

 

To assist market understanding of these regulatory expectations an information page is provided here which outlines some of an issuer's and its advisers’ key obligations throughout an IPO.

 

In support a document is also provided which contains important notices that an AFS licensee is required to provide to an issuer of financial products in connection with a potential initial public offering under RG 264. Word versionPDF version

Guide email JLM language on joint activity for the Equity Capital Market and Debt Capital Market

 

In the context of Australian competition law, it is good practice to acknowledge in writing (commonly through an email) the intention to conduct a joint activity in the preliminary communication about forming a new syndicate for a mandate. Standard language for emails from a JLM and an Issuer is provided as a general guide only to indicate the good practice in Australia using similarly worded emails when JLM come together to facilitate a capital raising by an Issuer in order to indicate their intention to collaborate to the extent necessary to assist their client issue or sell equity or debt (as applicable). 

 

MARKET TRANSACTIONS

Confidentiality Terms

The Documentation Committee is pleased to endorse the New York-based Global Documentation Steering Committee (GDSC) Confidentiality Terms (2004) to help simplify documentation procedures and facilitate financial markets transactions.

AFMA endorses the use of the Confidentiality Terms in Australia to avoid the time and effort involved in negotiating confidentiality agreements. Market participants can adopt these confidentiality terms to achieve mutual commercial objectives, although it is suggested that Australian users consider modifying the terms so that a relevant Australian law governs them. This could be achieved by the simple amendment of replacing clause (4.4).