SAS 72 comfort letters in international securities offerings for non-US lawyers


Produced in partnership with Peter Kohl of Hogan Lovells International LLP
Practice notes

SAS 72 comfort letters in international securities offerings for non-US lawyers


Produced in partnership with Peter Kohl of Hogan Lovells International LLP

Practice notes
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The underwriters or initial purchasers in an international securities offering will customarily require that the issuer's accountants provide one or more comfort letters relating to financial information contained in the prospectus or offering memorandum relating to the offering. Comfort letters are an important part of the underwriters' due diligence review and defence from potential liability under US securities law.

Comfort letters are often referred to as SAS 72 letters, which relates to the Statement on Auditing Standards 72 (SAS 72) on which they are based. The Statement on Auditing Standards 72 has now been superseded by AU Section 634, Letters for Underwriters and Certain Other Requesting Parties (AU 634).

Comfort letters and the 'due diligence' defence

The basis for potential liability under US securities laws differs depending on whether the offering is publicly offered in the US, ie registered with the Securities and Exchange Commission (SEC), or privately offered to US investors, eg in an institutional placement in accordance with

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Jurisdiction(s):
United Kingdom
Key definition:
Securities definition
What does Securities mean?

This is one of the groups of regulated investments defined in the regulated activities order (the other groups being identified as contractually based investments and others).

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