IIROC Proposes Guidance On Underwriting Due Diligence

OVERVIEW

The Investment Industry Regulatory Organization of Canada (IIROC) recently published for comment a proposed guidance note (Proposed Guidance) setting out general principles and specific suggested practices for underwriting due diligence in respect of public offerings. The goal of the Proposed Guidance is to promote consistency and enhanced underwriting due diligence standards. The Proposed Guidance is principally based on current market practices and does not create new legal obligations or prescribe what constitutes "reasonable" due diligence. The deadline for providing comments on the Proposed Guidance is June 4, 2014.

Each firm underwriting a public offering is required to certify that to the best of its knowledge, information and belief the prospectus constitutes full, true and plain disclosure of all material facts relating to the offered securities. A reasonable investigation of the material facts underlying the disclosure in the prospectus allows