Capital Raising Mandate Agreement Template for England and Wales

A Capital Raising Mandate Agreement is a crucial legal document that formalises the relationship between your company and financial advisors when seeking to raise capital in England and Wales. This agreement establishes clear terms for professional assistance in securing funding through private placements, public offerings, debt issuance, or other capital raising mechanisms while ensuring compliance with UK financial regulations.

When do you need this document?

You need this agreement when engaging investment banks, financial advisors, or capital markets professionals to assist with fundraising activities. It's essential for companies planning IPOs, seeking private equity investment, issuing corporate bonds, or pursuing venture capital funding. The document becomes particularly important when multiple parties are involved, such as lead managers and co-managers in syndicated transactions. You'll also require this agreement when your capital raising activities fall under FCA regulatory oversight or involve sophisticated investors who demand professional intermediation.

Key legal considerations

Several critical legal elements must be addressed in your Capital Raising Mandate Agreement. The scope of services clause should clearly define the financial advisor's obligations, including due diligence support, investor presentation preparation, and transaction execution. Fee structures require careful consideration, particularly success fees and expense reimbursement provisions that could significantly impact transaction economics. Confidentiality clauses are vital given the sensitive financial information shared during capital raising processes. Termination provisions should specify circumstances allowing either party to exit the arrangement and address ongoing obligations post-termination. You must also consider exclusivity arrangements that may restrict your ability to engage multiple advisors simultaneously.

Legal requirements in England and Wales

Under England and Wales law, your Capital Raising Mandate Agreement must comply with the Financial Services and Markets Act 2000 and related regulations. The FCA Handbook, particularly the Conduct of Business Sourcebook (COBS), imposes specific requirements on regulated firms providing investment services. Your agreement must address regulatory permissions and ensure all parties hold appropriate FCA authorisation for their intended activities. The Companies Act 2006 governs aspects related to share issuance and corporate actions that may form part of capital raising activities. Directors' duties under the Companies Act require careful consideration when selecting financial advisors and agreeing fee structures. The Enterprise Act 2002 may also apply to transactions involving competition considerations. Additionally, your agreement should incorporate relevant provisions from the Financial Services Act 2012, particularly regarding the division of regulatory responsibilities between the FCA and PRA where applicable.