Verification process in ECM corporate exercise

Equity capital markets (ECM)

One of the earliest lessons I have learned as an equity capital markets lawyer is this:

Submission documents must not contain any statement or information which is false or misleading or from which there is a material omission.

Being provided with information at the eleventh hour just before a prospectus or circular is about to be submitted to the relevant authorities, which may render any statement in the prospectus or circular false or misleading or from which there is a material omission, is possibly an ECM lawyer’s worst nightmare.  In such instance, this is usually followed by calls between the due diligence working group (DDWG) members to discuss the information and a race against time to amend the submission documents.

A typical verification process for a submission document looks like this:

Every statement in the submission document would have been reviewed, commented and verified by the DDWG members, sometimes multiple rounds, before the document is submitted to the relevant authorities or issued to the public.

The importance of ensuring the submission document meets the standard of disclosure required under the Capital Markets and Services Act 2007 and Listing Requirements is highlighted to the DDWG members during the kick off meeting, set out in the due diligence planning memorandum and repeated again during the verification meeting. The DDWG members sign the verification minutes, confirming that the information in the submission document is true, not misleading and does not contain any material omission.


This post was first posted on 4 August 2021.

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