Finance Security Juridical Due Diligence of Issuer in IPO Organization

The article deals with complex research of legal aspects of juridical due diligence of issuer in IPO organization in the Russian Federation. The author showed the fundamental problem of the absence of specific legal regulation of due diligence institute in public offerings, which creates legal uncertainty for stock market participants. On the basis of the effective legislation on securities market, corporate law, administrative practice and overseas experience legal nature of juridical due diligence is studied as mechanism of identifying and revealing legal risks of issuer. The author systematized lines of juridical verification covering corporate-legal status, rights on assets, contract relations, court disputes, compliance with regulatory requirements. Special attention is paid to distribution of responsibility between issuer, offering organizers and legal consultants for information trustworthiness in securities prospectus. Attention is drawn to specificity of juridical verification of state-owned corporations planning IPO. Scientific novelty of the research lies in the development of the concept of legal regulation of juridical due diligence in IPO, formulation of due diligence criteria of its holding and proposals on legislative securing of this procedure standards. Findings of the research are of practical importance for upgrading legal support of economic and financial security of investors, development of Russian market of public offerings and protection of corporate relation participants’ rights.

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