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Role of the advisers - Coggle Diagram
Role of the advisers
Corporate Broker
The broker acts as a link between the company and investors following listing and admission to the market
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It is important to select a broker with analysts who have appropriate expertise in the company's sector
Many firms can act as both sponsor and broker, and this may be appropriate however one firm acting in both capacities can cause difficulties when the sponsoring arm has information that if passed on to the broking arm would put them in the position of not being able to trade in the company's shares as they would be in possession of price sensitive information which would give them an unfair advantage when trading shares
The broker will also actively market the shares to secure the success of the issue, this is often referred to as book building
During the book building phase, non binding commitments to invest are obtained for an aggregate amount of money as until the last day of any offer, the actual share price will not be known
Lawyers
Typically there will be two firms appointed, the first advising the company and the second advising the sponsor
The company's lawyers will often lead the process of drafting documents in conjunction with the sponsor and with all other interested parties commenting on those drafts
The companys lawyers will also undertake verification, this is the process under which factual statements within the documents are verified to prove that they are based on fact
Verification is a painstaking task requiring companies to search heir archives for old documents, agreements, research notes etc
Verification is essential to ensure that statements made by directors are true and that potential investors can rely on these statements
Directors carry personal liability for false and misleading statements in prospectuses or listing particulars
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Reporting accountant
Separate and distinct function from that of the company auditor, the reporting accountant is often the company auditor albeit staffed from the corproate finance department rather than the audit department
Role is to review the company's financial history, accounting systems and internal controls and to prepare a report for the benefit of potential investors
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Share Registrar
Whether the shares are to be listed and traded on the Main Market or another market, the company will need the retain the services of a CREST compliant share registrar to maintain the share register and is required in order to facilitate electronic share trading and settlement via CREST
It is the share registrar that will maintain the register of members, preparing main lists whenever documents are required to be issued to memebrs as well as processing dividend and other payments to members as required
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