1. Purpose and Scope
1.1 Purpose
These Rules apply to any person or entity approved by IDSX (the Exchange) to act as an Underwriter for securities admitted or proposed for admission to IDSX. They seek to ensure fair, orderly and transparent offerings; adequate financial and operational capacity; proper investor allocation and distribution controls; identification and management of conflicts; accurate information to Issuers, investors and IDSX; no manipulative or misleading conduct; appropriate records; and orderly admission and distribution.
2. Definition of Underwriter
2.1 Underwriter
An Underwriter is an entity approved by IDSX to participate in structuring, distribution, placement or underwriting of an Issuer’s securities. Subject to Applicable Law and IDSX approval, it may purchase securities for resale; commit to acquire unsubscribed securities; conduct best-efforts placements or investor bookbuilds; solicit demand; allocate securities; coordinate offering settlement; advise on pricing; form an underwriting syndicate; and perform other approved functions.
3. Separate Role
Underwriter approval does not automatically authorise an entity to act as Sponsor, Broker, Trading Participant, Market Maker, Custodian, financial adviser or other regulated intermediary. A separate role requires separate approval under its applicable Rules.
4. Underwriting Structures
IDSX may permit Firm Commitment, Standby, Best Efforts, Minimum-Amount, Maximum-Amount, Bought Deal, Syndicated Underwriting, Private Placement, Institutional Placement or another approved structure. The applicable structure must be clearly disclosed.
5. Firm Commitment Underwriting
The Underwriter agrees to purchase all or an agreed portion of the offering. The written agreement must specify the number or value of securities, underwriting and offering prices, fees, settlement terms, conditions precedent, termination rights, liability allocation and syndication arrangements. An Underwriter must not make a Firm Commitment without reasonable grounds to believe it can meet it when due.
6. Standby Underwriting
The Underwriter agrees to acquire securities left unsubscribed. The agreement must state the maximum commitment, exercise conditions, commitment period, pricing method, settlement obligations and termination conditions.
7. Best Efforts Offerings
A Best Efforts Underwriter does not guarantee completion unless expressly agreed otherwise. It must distinguish a guaranteed underwriting commitment from a commercially reasonable distribution or placement obligation and must not describe a Best Efforts offering as fully underwritten.
8. Eligibility Requirements
An applicant must satisfy IDSX that it is legally established; has appropriate professional experience and sufficient financial resources; maintains adequate compliance and internal controls; employs competent personnel; has appropriate distribution capabilities and systems; can perform investor due diligence where required; maintains appropriate records and conflict controls; and is fit and proper to act as an Underwriter.
9. Regulatory Status
An Underwriter must hold all licences, registrations, permissions or exemptions required for its activities. IDSX approval is not a regulatory licence. An overseas Underwriter may be approved if it is legally permitted to provide the services; subject to acceptable standards; can provide information for IDSX supervision; can comply with IDSX Rules; and its jurisdiction creates no unacceptable legal or enforcement risk.
10. Financial Resources
10.1 General Requirement
An Underwriter must maintain financial resources appropriate to the size and nature of its commitments.
10.2 Assessment
IDSX may consider net assets, working capital, liquidity, available cash, credit facilities, capital commitments, contingent liabilities, outstanding exposure and concentration risk.
10.3 Evidence
IDSX may require financial statements, management accounts, bank confirmations, funding evidence, committed credit facilities, capital adequacy calculations or other evidence of capacity.
11. Maximum Underwriting Exposure
IDSX may limit an Underwriter’s commitment to one or multiple offerings, considering net assets, liquid capital, total funding, size, risk profile, existing commitments and concentration, and may set an individual lower limit.
12. Underwriting Agreement
Every material arrangement must be in writing and specify, where applicable, the parties, securities, structure, commitment, underwriting and offering prices or pricing method, fees and selling commission, allocation method, settlement date, conditions precedent, representations and warranties, indemnities, termination and force majeure rights, syndication, any stabilisation and governing law.
13. Pricing
13.1 Pricing Process
The Underwriter must use a reasonable, documented pricing or recommendation process considering Issuer financials, valuation, comparable companies, investor demand, market conditions, liquidity, offering size, dilution, transfer restrictions and other relevant commercial factors.
13.2 No Artificial Pricing
It must not establish or support a price to create a false market, conceal weak demand, improperly benefit a related person or mislead investors about security value or demand.
14. Bookbuilding
For a bookbuild, the Underwriter must record investor indications, size, proposed price, timing, classification, amendments, withdrawals, final allocations and relevant communications. The process must be fair and free from misleading representations.
15. Investor Eligibility
The Underwriter must take reasonable steps to distribute securities only to legally eligible investors, considering jurisdiction, investor classification, offering restrictions, sanctions, KYC, AML/CFT, product eligibility, shareholder limits, foreign ownership and wallet-whitelisting requirements.
16. Investor Identification
An Underwriter with a direct investor relationship must perform legally required identification and due diligence. It may rely on Brokers or other intermediaries only where legally permitted and reasonable. IDSX may require ultimate-investor information where necessary.
17. Allocation of Securities
17.1 Fair Allocation
The Underwriter must maintain a fair, consistently applied allocation policy.
17.2 Allocation Factors
Legitimate factors may include order size, investor type, long-term interest, strategic value, ownership diversification, jurisdiction, settlement capability and order timing.
17.3 Prohibited Allocation Practices
It must not allocate primarily to reward unrelated commercial business; benefit employees or related parties without appropriate disclosure; influence future mandates; create artificial demand; facilitate manipulation; or circumvent eligibility requirements.
18. Related-Party Allocations
Allocations to directors, employees, controlling shareholders, affiliates, the Underwriter, Sponsor, Market Maker or connected persons must be documented and managed. IDSX may require disclosure or restrict them.
19. Underwriter’s Own Allocation
An Underwriter may retain securities for its own account only where legally permitted, consistent with the agreement, disclosed where required, not intended to create a false market, and subject to appropriate conflict controls.
20. Underwriting Syndicates
An Underwriter may form or join a syndicate. The lead must oversee it. The syndicate agreement should allocate commitments, distribution, due diligence, investor allocation, settlement, fees, liability and communications with the Issuer and IDSX.
21. Lead Underwriter
IDSX may require a Lead Underwriter to coordinate members, bookbuilding, pricing, allocation, settlement and communications with the Sponsor, Issuer and IDSX.
22. Interaction with Sponsor
The roles are separate: the Sponsor primarily addresses admission suitability, due diligence, disclosure quality and ongoing Issuer compliance; the Underwriter primarily addresses distribution, demand, pricing, allocation, commitments and offering execution. One entity may perform both only if separately approved and conflicts are managed.
23. Due Diligence
An Underwriter must perform due diligence appropriate to its role. It may consider Sponsor and adviser work but must not rely on it blindly. It should understand matters material to pricing, investor demand, distribution risk, underwriting exposure, settlement and investment risks.
24. Offering Documents
When preparing or distributing materials, the Underwriter must take reasonable steps to ensure they are not materially false or misleading. It must not distribute materially inconsistent information, undisclosed side materials, misleading forecasts, guaranteed-return claims or information known to materially conflict with approved Issuer disclosures.
25. Marketing Conduct
Offering communications must be fair, clear, not materially misleading, consistent with applicable disclosures and suitable for the intended audience. The Underwriter must not create false urgency or scarcity.
26. Pre-Offering Communications
Pre-opening communications must comply with law. Pre-marketing or investor sounding must not result in unlawful solicitation, selective disclosure of material non-public information, manipulation or misleading claims about demand.
27. Investor Demand
An Underwriter must not fabricate orders, exaggerate demand, present non-binding interest as firm, create circular subscriptions, use related parties to simulate demand or otherwise create a false impression of market interest.
28. Minimum Subscription Conditions
Any minimum threshold must be disclosed. If it is not met, the offering must not be treated as complete except as its terms permit; investor money must be handled lawfully; required refunds must be made; and IDSX must be informed.
29. Maximum Offering Size
An Underwriter must not knowingly accept subscriptions above the maximum unless the terms permit over-allotment, an appropriate greenshoe or equivalent exists, or IDSX approves.
30. Over-Allotment
An over-allotment must be documented with its maximum, responsible party, duration, pricing, settlement and any stabilisation relationship.
31. Price Stabilisation
Stabilisation is permitted only where lawful, disclosed, limited to a defined period, subject to documented limits, recorded and not used to mislead the market. Additional IDSX requirements apply.
32. Market Making Distinguished from Underwriting
Underwriting does not create continuing Market Maker obligations. After completion, liquidity is not required unless the Underwriter is separately appointed, enters a liquidity arrangement or applicable offering Rules require it.
33. Restrictions on Trading
The Underwriter must control proprietary and employee trading during sensitive periods, potentially through restricted lists, information barriers, pre-clearance, blackout periods, monitoring and post-trade review.
34. Material Non-Public Information
An Underwriter must protect material non-public information and must not trade on it, disclose it improperly, enable another person to trade, benefit another Client or misuse it commercially.
35. Conflicts of Interest
The Underwriter must identify, manage and, where appropriate, disclose conflicts, including Issuer holdings or lending; Sponsor, Market Maker or Broker roles; advisory mandates; related-party investors; underwriting exposure; performance fees; and proprietary trading.
36. Underwriting Fees
Fees must be documented and may include underwriting commissions, placement, management, bookbuilding, selling, structuring and other agreed professional fees. Arrangements must not be materially misleading.
37. IDSX Fees
IDSX fees are separate from Underwriter fees unless expressly stated. The Underwriter must not misrepresent a private fee as imposed by IDSX.
38. Client Money and Offering Funds
An Underwriter receiving investor money must be legally authorised and comply with Client Money requirements. Investor funds must not be mixed with its own where segregation is required. Escrow terms must be followed.
39. Settlement
The Underwriter must support timely settlement, including investor funding confirmation, allocation, delivery instructions, wallet information, custody, transfer-agent coordination, reconciliation and failed-settlement management as applicable.
40. Tokenised Securities
For blockchain or distributed-ledger securities, the Underwriter must understand distribution mechanics, including issuance, whitelisting and eligibility, minting, allocation and delivery, settlement, supply, custody, smart-contract restrictions and reconciliation with the official register.
41. Initial Token Distribution
For tokenised offerings, reasonable steps must ensure initial tokens match approved allocations and are not knowingly sent to unidentified or ineligible investors, prohibited jurisdictions, sanctioned persons or non-whitelisted wallets where whitelisting is required.
42. Failed Offering
If an offering fails or is withdrawn, the Underwriter must cooperate with the Issuer, Sponsor, Brokers and IDSX on orderly cancellation of allocations, return of funds, token cancellation or burning, register updates, investor notices, unsettled transactions and records.
43. Default by Underwriter
An Underwriter unable to meet a commitment must immediately notify the Issuer, Sponsor and IDSX. IDSX may require replacement funding or Underwriter, syndicate reallocation, suspension, revised disclosure or cancellation.
44. Default by Investor
The Underwriter must maintain procedures for settlement failures, including cancelling or reallocating securities, using underwriting commitments, enforcing contracts and other lawful remedies.
45. Records
Records must reconstruct each offering and include agreements, investor orders and bookbuilding, allocations, pricing analysis, communications, settlement, commitments, syndicate arrangements, conflicts, marketing materials, approvals and IDSX communications.
46. Retention of Records
Records must be retained for the period required by law or IDSX and be provided to IDSX without undue delay.
47. Notifications to IDSX
The Underwriter must promptly report material matters, including inability to meet a commitment; funding changes; significant investor withdrawals; unmet minimum subscriptions; material pricing or agreement changes; suspected fraud or misrepresentation; regulatory investigations or sanctions; serious settlement failure; significant conflicts; cybersecurity incidents; and other events materially affecting the offering.
48. Cooperation with IDSX
The Underwriter must cooperate with IDSX on admission and offering reviews, surveillance, investigations, allocation enquiries, settlement, regulatory enquiries and enforcement.
49. Outsourcing
Outsourcing investor onboarding, KYC, settlement, payments, bookbuilding technology, custody, token distribution or records does not remove the Underwriter’s responsibility. It must oversee material outsourced functions reasonably.
50. Professional Conduct
An Underwriter must act with integrity, professional competence, due care, diligence, appropriate independence and respect for market integrity.
51. Misconduct
Misconduct may include false bookbuilding or fabricated demand; misleading marketing or improper allocation; misuse of investor money; failure to honour commitments; concealed conflicts; price manipulation; unauthorised distribution; misuse of inside information; false IDSX reporting; or repeated material operational failures.
52. Supervisory Action
IDSX may request information, require remediation or conditions, reduce exposure limits, bar new offerings, require additional resources or replacement personnel, suspend status or terminate it.
53. Suspension
IDSX may suspend an Underwriter whose eligibility fails, regulatory permission is suspended, financial condition is impaired, serious misconduct is suspected, cooperation fails, a commitment is materially breached or suspension is reasonably necessary to protect investors or market integrity.
54. Termination
IDSX may terminate status for serious or repeated breaches, materially false information, insolvency, repeated commitment failures, loss of required regulatory status, failure to remedy deficiencies or other unsuitability.
55. Continuing Liability
Suspension or termination does not remove obligations under prior underwriting agreements. The Underwriter must cooperate in orderly completion or unwinding of affected offerings.
56. No IDSX Guarantee
IDSX approval does not guarantee Underwriter solvency or performance, offering completion, investment quality or returns, or secondary market liquidity.
57. Responsibility of Issuer
Underwriter appointment does not relieve the Issuer or its directors of responsibility for disclosure, legal compliance, information accuracy, valid issuance, use of proceeds or other obligations under law or IDSX Rules.
58. Proportionality
Requirements should reflect offering and Issuer size, investor type, distribution method, security structure, jurisdiction, exposure and overall risk. Proportionality does not permit misleading conduct, inadequate financial capacity or compromised integrity.
59. IDSX Directions
IDSX may publish underwriting guidance, capital standards, exposure limits, bookbuilding procedures, allocation guidance, declarations, settlement procedures, token-distribution standards and other practice notes or technical requirements. An Underwriter must comply with binding directions.
60. Amendments
IDSX may amend these Rules and will provide reasonable notice of material amendments unless immediate implementation is required for legal, regulatory or market-integrity reasons.
61. Interpretation
Terms defined in IDSX General Rules have the same meaning unless stated otherwise. Securities include tokenised, distributed-ledger or other digital representations where appropriate. Technological form does not alter legal issuance or distribution obligations.
62. Effective Date
These Underwriter Rules take effect on the date determined and published by IDSX.
IDSX · Underwriter Rules — Version 1.0