29 November 2007

IOSCO final report on Private Equity

IOSCO published its final report on Private Equity. The paper identifies those issues generated by the activity of the private equity industry which potentially create risks that impact on IOSCO's objectives and principles, and also sets out the next steps to be taken by IOSCO.

“This report has identified a number of areas where private equity may pose potential risks to financial markets” Michel Prada, Chairman of the IOSCO Technical Committee, said. "We will recommend that the Joint Forum analyzes the complexity and leverage of buyout vehicles and IOSCO will analyze the conflicts of interest that arise during private equity transactions and how these are addressed."

IOSCO’s future work will include:

- Recommending a survey of the complexity and leverage of capital structures employed in leveraged buyout transactions to the Joint Forum, to allow for an assessment of the potential impact that the default of large private equity portfolio companies could have on the efficient operation of related public debt securities markets and any systemic issues which may arise as a result; and

- Analysis of conflicts of interest which arise during the course of private equity business and the controls utilised across relevant IOSCO member states which aim to provide appropriate levels of investor protection. Key areas of focus will be public-to-private transactions and the listing (or subsequent re-listing) of private equity portfolio companies.

Deadline for comments is 20 February 2008.

Press release

Report

© IOSCO