The Australian Securities & Investment Commission has finalised guidance protocols that will assist companies produce better prospectuses. The Commission has also released an accompanying webpage on MoneySmart that will assist potential investors understand them.

 

ASIC Deputy Chairman, Belinda Gibson, said the market had welcomed the draft guidance published in April and that a number of companies had already used the guidance to produce more user-friendly prospectuses with better quality information presentation.

 

‘We’re now seeing some prospectuses that clearly advise retail investors about what information they should focus on, in language they can understand. We’re also seeing prospectuses that explain key risks from the investor’s perspective — this is a big improvement on prospectuses that list every conceivable risk but give no useful information on any of them’, Ms Gibson said.

 

ASIC received 22 submissions on CP 155 from stakeholders including leading industry associations and several law and accounting firms. These submissions were very positive about ASIC’s proposal to give guidance on prospectuses. However, there were differing views on some issues such as the use of photographs, disclosure of financial information and directors’ track records. Requests were also made for further guidance on disclosure of confidential information about a company’s business.

 

‘We took all the comments into account and consulted further on some issues to refine our guidance. Leading lawyers, investment bankers, accountants and investor representatives generously shared their ideas. The result we think is innovative and world class guidance’, Ms Gibson said.

 

The MoneySite prospectus assistance site can be found here