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Unlike New York and London, Hong Kong has not yet provided standard forms for legal agreements between subscription agreements. Unions take advantage of the market when share issues are too large to be managed by a single company, allowing multiple companies to sell an offer quickly and fully. However, the inefficiencies are traditionally due to the use of standard A agreements between union members. As a culmination of one of its longer-term projects, ASIFMA`s Capital Equity Markets Committee (ECM) has just published a series of standardised agreements for non-authors. They are free for any practitioner to use them via the ASIFMA website. Committee members identified this issue as a key area for improving efficiency and market improvement. The use of standardized language also promotes efficiency by reducing the need to prepare, execute and print tailor-made agreements for each transaction and by providing a largely unversialed set of concepts, which likely require little negotiation and will be familiar to practitioners in the long run when the standard becomes mainstream practice. This should reduce the costs of external consultants as well as some legal risks. Negotiating non-standard agreements takes longer and exposes underwriting banks to potentially increased risks between the bank`s pricing of a transaction and the signing of consortium contracts. Standard agreements govern the relations between the different sub-authors and between the different underwriting unions. In addition, in the absence of an industry standard, companies tend to establish agreements on the basis of agreements that they had previously used and that may or may not have been verified in recent times.

This can lead to unnecessary and outdated conditions that might not be relevant to the current formation of trade unions, increasing the legal complexity of documents and slowing down the negotiation of general terms and conditions. The agreements are structured in such a way that the commercial conditions are set out in a timetable of the agreement. In practice, combined with the standard language of the agreement itself, this benefits the market, as unresolved conditions do not prohibit the execution of the agreement during the pricing phase and ensure that rights and obligations are granted in a timely manner to sub-authors and union members, which is so important if many other variables can change during a typical IPO process. . . .