Traits Of An Underwriters Counsel And Its Responsibilities

By Annabelle Holman


Companies, businesses, and even the government usually issue bonds to those who are interested in purchasing them. The bonds usually will indicate that the purchaser will be given a certain monetary remuneration after a certain period of time has elapsed. The money collected from the purchase will then be used by these bodies to finance a certain project or undertaking.

An underwriting firm has the capability of selling these bonds to prospective purchasers. Since there are a lot of legal aspects for this financial transaction, an underwriters counsel is sought for assistance. This counsel acts as a representative of the underwriter. It will be performing several duties to ensure that the transaction goes smoothly.

Adequate knowledge and the required expertise for the agreement are attributes that the group should have. They need to provide assurance to the issuing company that they understand the job that they need to perform. For these transactions, an extensive experience regarding the field is certainly important. Conflicts of interests should be avoided so that the representatives can do their tasks.

The group represents the underwriting firm. For this, the members should be able to uphold the private nature of the economic and financial condition of the issuing body. For the issuer and the underwriter to avoid certain financial risks, the group needs to evaluate the status and situation of the finances of the issuer.

The duties of the group may vary. They would depend on the agreement reached by the issuer and the underwriting company. The most common task that they need to do is prepare and review the disclosure statements of the issuing body. This document is important as it consists of important financial matters such as interest rates.

To be able to complete the transaction, legal roadblocks should be prevented. Because of this, the lawfulness and legality of the transaction should be evaluated. The representatives have to see to it that the bonds meet and comply with the regulations set by the government who has jurisdiction of the trade agreement. They need to have thorough examination of the said bonds.

Another thing that they have to do is to draft the bond offer contract which typically includes the official statement. This contract is a form of a guarantee that should benefit both the purchaser and the client. This legal paper normally consists of the purpose why the bonds are issued, the manner of repaying them, and the financial and economic position of the issuer and its capability to pay in the future.

They will also be preparing a written agreement which incorporates the terms agreed upon by the client and the underwriting firm. The representatives may also need to prepare underwriting agreements. This is usually the case when the issuer of the securities conducts a bidding process among multiple underwriters.

Effective and constant communication should be a priority. Representatives and the underwriting organization should be able to communicate with each other. With this, all those involved in the transaction will be able to reach their objectives.




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