• OFS-3.6 OFS-3.6 Role and Responsibilities of the Underwriter

    • Eligibility

      • OFS-3.6.1

        Any person acting as an underwriter to any offering, must be licensed or otherwise authorised by the CBB to undertake such activity.

        January 2014

      • OFS-3.6.2

        For the purpose of this Module, the definition, role and requirements related to the underwriter also apply to co-underwriters.

        January 2014

      • OFS-3.6.3

        The CBB may investigate the financial suitability of a proposed underwriter and may reject the appointment of the underwriter and/or the application for offering if it is not satisfied as to the underwriter's ability to meet its commitment under the proposed underwriting agreement and its potential impact in its capital adequacy.

        January 2014

    • Firm Commitment Underwriting

      • OFS-3.6.4

        Where an underwriter has been appointed and the securities are not fully subscribed during the offering period, the underwriter must purchase the balance of the securities through a firm commitment underwriting arrangement.

        January 2014

      • OFS-3.6.5

        The firm commitment underwriting arrangement must be detailed in an underwriting agreement, which must be submitted to the CBB as part of the offering of securities application.

        January 2014

      • OFS-3.6.6

        For the purpose of this Module, the total of all the underwriting undertakings of the underwriter, the company that controls it, its subsidiary, a subsidiary of the company that controls it and a company affiliated with it, are calculated as one underwriting undertaking.

        January 2014

      • OFS-3.6.7

        The underwriter may appoint or form an underwriting group for any underwritten issue.

        January 2014

      • OFS-3.6.8

        The underwriter must comply with the CBB Law, rules and regulations, including Volume 6 of the CBB Rulebook, and the issuer's Memorandum and Articles of Association, particularly in respect of the eligibility of the expected subscribers to acquire the issuer's securities and related disclosure requirements.

        Amended: October 2017
        January 2014

      • OFS-3.6.9

        After the approval of the offering documents (including the underwriting agreement) neither the issuer nor any advisor or person acting on its behalf, nor the underwriter or any person acting on its behalf, has the right to change any provision or commitments stipulated in the underwriting agreement.

        January 2014

      • OFS-3.6.10

        All commitments, terms and conditions stipulated in the underwriting agreement must be enforced and implemented without any change or alterations, including the relevant timeframes.

        January 2014

      • OFS-3.6.11

        The CBB may consider amendments to an underwriting agreement where the stability of the financial sector and/or capital market will be adversely affected by the agreement's current provisions. In this regard, the CBB must be provided with a supporting application signed by both the issuer and the underwriter, before considering such amendment.

        January 2014

    • Firm Commitment Underwriting

      • OFS-3.6.12

        A firm commitment underwriting arrangement is required for all public offerings. However, the CBB may accept other underwriting arrangements other than firm commitment underwriting, in the following cases:

        (a) Offering of securities below the average market price during the last six months; or
        (b) Offering of securities at the flat par value.
        January 2014

      • OFS-3.6.13

        A firm commitment underwriting arrangement may also be done through a bought-out deal wherein the underwritten issue is bought entirely by the underwriter to resell to investors.

        January 2014

      • OFS-3.6.14

        In case of issues which are exempted from firm commitment underwriting arrangements (non-public offers), the CBB may accept partial underwriting commitment arrangements, or best-efforts underwriting.

        January 2014

    • Disclosure

      • OFS-3.6.15

        The name of the underwriter and the terms of the underwriting agreement must be prominently disclosed in the offering document and in the application for approval.

        January 2014

      • OFS-3.6.16

        A summary of the underwriting agreement or arrangements must be provided in the prospectus or offering document, including but not limited to the cost of underwriting and other related fees and charges.

        January 2014

      • OFS-3.6.17

        The underwriter is required to provide sufficient and adequate information to the CBB and disclose the same in the prospectus or offering documents as to the method, bases, mechanism, assumptions, and all other related information used to reach the offering price.

        January 2014

      • OFS-3.6.18

        In cases where the offering price is determined by the underwriter jointly with any other advisor or third party, the name and role of such advisor or person must be provided to the CBB and disclosed in the prospectus or offering document.

        January 2014

      • OFS-3.6.19

        The underwriting agreement must be provided as a document available for inspection to the subscriber.

        January 2014

      • OFS-3.6.20

        For purposes of Paragraph OFS-3.6.17 and item 25.1(b) under Section 17 of Appendix OFS-1, relating to the pricing of securities and bases or methods for determining the issue or offer price and for prospectus disclosure purposes, the bases used for determining the pricing of securities must be elaborated on and general statements must be avoided.

        Added: October 2017

      • OFS-3.6.21

        For purposes of Paragraph OFS-3.6.20, factors that are commonly cited in pricing determination which should be elaborated may include, but are not limited to, prevailing market performance and condition (e.g. price earnings ratio, dividend yield, etc.), financial and operating performance (e.g. earnings per share, etc.), consolidated net tangible assets per share and/or net assets per share (or liabilities as to the case may be), earnings potential, assessment of management, market valuation of companies in related businesses, intellectual property and technology, etc. Where appropriate, cross-references should be made to the relevant and specific sections of the prospectus.

        Added: October 2017