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ASIC REGULATORY GUIDE 264

Information for Issuers on IPO transactions

What is this page about?

ASIC has published Regulatory Guide 264 (Sell Side Research) (RG 264) which provides guidance on how Australian financial services licensees (licensee) must manage conflicts of interest and handle inside information as it relates to research analysts and sell-side research. Importantly, RG 264 covers how issuing entities (issuer) should interact with licensees and, in particular, their research analysts in connection with a potential initial public offering (IPO) transaction. For the purpose of this page and as the context requires, an issuer includes the directors, employees and shareholders of issuing entities.

It is imperative that issuers and their advisers are familiar with the requirements of RG 264 and do not at any time place pressure on a licensee's research analyst or otherwise seek to influence the research. Licensees have policies on the independence of research by their analysts and licensees will be able to assist issuers if they would like more information on how relevant sections of their policies can be accessed.

This page outlines some of an issuer's and its advisers’ key obligations throughout an IPO. If issuers have questions or concerns about this page, they should seek independent legal advice. This page is general in nature and does not constitute legal advice. It does not take into account the circumstances of any particular issuer.

This page assumes an issuer is not listed. If an issuer is listed, different considerations may apply in relation to how it may interact with a licensee's research analyst in the ordinary course.

IPO Stages

The three stages of an IPO transaction identified under RG 264 are set out below together the guidance on an issuer's conduct during those stages:.

(1) IPO Pre-Solicitation

Commences...

  • When a licensee approaches an issuer in relation to a potential IPO.
  • This includes, for example: an issuer or its adviser sending a licensee a request for proposal (RFP); an issuer or its advisers contacting a licensee directly about a potential IPO; and an unsolicited approach from a licensee to an issuer about an IPO mandate.

What an issuer must not do:

  • If an issuer knows a licensee will make a pitch presentation to it within the next 7 days, the issuer must not interact with the licensee's research analyst unless the licensee’s compliance function informs the issuer otherwise.
  • An issuer must not provide a licensee's research analyst with information which may constitute inside information about that issuer or a competitor, unless the licensee's compliance function tells the issuer the research analyst has been wall-crossed on the IPO.
  • An issuer and its advisers must not ask a licensee's research analyst for their views on valuation information1 about the issuer or a competitor or express or pass on any of their views on valuation information to the research analyst.
(2) IPO Transaction Pitching

Commences...

  • The earlier of when an issuer becomes aware that a licensee has decided to pitch for an IPO or seven days before a pitch to the issuer.
  • This includes, for example: a formal presentation by a licensee in response to a RFP; an unsolicited presentation or meeting with a licensee; a licensee's mandate letter being sent to an issuer (even if the licensee does not give a presentation); and a phone call from a licensee.

What you must not do:

  • Neither an issuer nor its advisers should communicate with or meet a licensee's research analyst, if the analyst is producing research in relation to the Issuer or the IPO before the transaction is completed.
  • An issuer must not request any commitment or provide any inducement for a licensee to provide research or favourable research coverage.
(3) Post-IPO Appointment


Commences...

  • When the issuer has notified a licensee or licensees (either verbally or in writing) that they have been appointed to an IPO role.
  • This may occur before a formal mandate letter is signed.

What an issuer must not do:

  • Outside of the research analyst briefing session, an issuer must not provide the licensee's research analyst with additional information, except through the licensee’s compliance function in response to a request from the licensee.
  • An issuer and its advisers must not ask the licensee's research analyst questions or seek information or comments on valuation information about the issuer or a competitor or express or pass on any views about valuation information to the research analyst.
  • Unless a licensee's compliance function informs the issuer otherwise, the issuer and its advisers must not contact the research analyst outside of the analyst briefing session.
  • When reviewing a draft of the redacted investor education report (IER), an issuer and its legal advisers must not pass on any comments other than factual or legal observations.
  • An issuer and its legal advisers must not share the draft IER, or opinions expressed in it, with any other party (including the licencee’s corporate advisory staff or the issuer’s non-legal advisers).
  • An issuer and its advisers must not attend any meetings a licensee's research analyst holds with potential investors to discuss the IER.



1 RG 264 defines “valuation information” to “[include] information relating to the valuation or likely valuation of a company or asset. This includes the valuation methodology and reason for its selection (including alternatives considered), the peer group comparable listed companies, appropriate valuation metrics and multiples, discount rates and growth assumptions, financial information (including forecasts) relating to the company, the indicative valuation calculations and range, the price target or recommendation.