Under the terms of the EU, Goldman Sachs will be required to undertake an “internal review” of its in-house processes, policies, training and guidance procedures, and will be required to pay a $500,000 community benefit payment, ASIC said in a statement.
The corporate regulator revealed it had concerns about Goldman Sachs Australia after “certain representations made by GS Australia to potential investors about the minimum fixed demand” following an investigation into a block trade transaction.
The investigation looked into a block trade transaction that took place on 23 November 2015 relating to shares in Healthscope Limited.
Under the EU, the "internal review" will include reviewing policies, procedures, systems, controls, training, guidance and the monitoring and supervision of employees engaged in equity capital market transactions lead managed by GS Australia and which involve a bookbuild or underwriting process, and implement changes to address any deficiencies identified”.
According to ASIC, a bookbuild is "the process of generating, recording and capturing demand from potential investors for a capital raising transaction".
The investment bank has made changes to its processes, including requiring:
- “legal or compliance approval of all bookbuild messages to be provided to potential investors in certain equity capital market transactions; and
- compliance attendance at any sales calls at the launch of certain equity capital market transactions to provide oversight of messaging to potential investors.”
A senior executive from GS Australia will have to provide an attestation to ASIC that the controls adequately address the regulator’s concerns.
