A global settlement agreement was entered into in October 2003 between the Securities and Exchange Commission (SEC), the New York Attorney General and several other securities regulators and prominent investment banks. The global settlement related to conflicts of interest in investment banks and imposed restrictions on the banks' practices surrounding research analysts, including prohibiting most communications between the banks' investment banking and research departments. In March 2010, the US District Court for the Southern District of New York (District Court) modified Addendum A to the global settlement agreement (modified order) to ease certain restrictions in limited circumstances. For the parties that signed the modified order, see Chaperoning Joint Due Diligence Checklist.

The modified order allows research analysts and investment banking personnel to simultaneously participate in due diligence sessions with issuers and certain other parties (joint due diligence sessions).

The rationale behind holding joint due diligence sessions is to ensure the issuer's and other parties' time dedicated to addressing due diligence queries is used efficiently. Even if the objective of these sessions for bankers (supporting their due diligence investigation efforts and due diligence defense) and analysts (informing their valuation analysis of the company) differs, the scope of the diligence that is conducted often overlaps to a large extent. Under the modified order, joint due diligence sessions must be chaperoned by counsel. The chaperone must be knowledgeable about the requirements of the modified order and about potential conflicts of interest between research analysts and investment bankers. This Toolkit includes selected resources that provide background information and examine specific considerations that relate to chaperoning joint due diligence sessions.