Private Equity & Conflicts of Interest
IOSCO – the International Organization of Securities Commissions – has published a consultation paper on ‘Private Equity Conflicts of Interest’. The working group was chaired by Dan Waters, the FSA’s Conduct Risk Division Director.
The document outlines the key conflict of interest risks through the life cycle of a typical private equity fund: Fund Raising; Investment; Management; and Exit. Chapter 5 sets out 8 principles for the effective mitigation of conflicts of interest although most, if not all, will be matters that such FSA regulated firms already consider in accordance with the requirements in SYSC 10.1. Annex 1 is interesting in that it provides an outline of typical private equity fund structures in various jurisdictions.
Comments to IOSCO are invited by 1 February 2010.