Allen Beller, director of the Securities and Exchange Commission's division of corporate finance, said it is aiming to clarify what constitutes due diligence for an underwriter of a transaction. To be sure, issuer requirements have not changed and the SEC is merely aiming to make clearer what responsibilities corporate borrowers have. "Nothing in the Securities Act suggests the special responsibilities of the various gatekeepers, including the underwriter, has changed," he commented.
Beller noted he is sympathetic to underwriters' aversion to the addition of any speed bumps to the transaction process. "I don't see any particular reason to slow down the process," he said. Instead, he believes some general ground rules should be set but it should still be left to issuers and underwriters to determine if their knowledge of a transaction is adequate.
