Following on from our
eAlert! on ASIC's proposed guidelines regarding prospectus
disclosures, ASIC has now finalised and released Regulatory Guide
228 Prospectuses: Effective Disclosure for Retail Investors (RG
Set out below is a summary of some of ASIC's key guidelines
for ensuring prospectuses are more useful to investors.
1. Investment overview
The first substantive section of the prospectus should be the
investment overview. The investment overview should highlight key
information about the issuer and the offer in a balanced manner and
provide cross-references to more detailed information later in the
Photographs (other than those on the front cover or title pages)
should only be included after the investment overview and should be
Risk disclosure should be specific and tailored to the
circumstances rather than being generic. Risk disclosure can be
made specific by explaining the likely consequences if the risk did
Risks disclosure should be organised logically with prominence
given to key specific risks rather than less important risks and
general risks relating to investing in shares.
3. Directors and management
ASIC has retained the requirement to disclose if the person has
been an officer of a company that entered into a form of external
administration because of insolvency and this occurred during the
time the person was an officer or within a 12 month period
afterwards. This requirement will not apply where it is clear that
the manner in which the company was managed was not responsible in
any way for the company failing.
4. Business model
Prospectuses should include a clear explanation of the
issuer's business model, that is, how the company proposes to
make money and generate income or capital growth for investors.
Prospectus issuers should utilise practical communication tools
such as using the active voice, direct language and verbs rather
than nouns. Issuers should also avoid overusing definitions, avoid
jargon where possible and use short sentences.
Prospectus issuers should avoid including irrelevant information
and reduce the length of the document, where possible. ASIC
suggests that information which is not essential to a retail
investor's assessment of the offer be incorporated into the
prospectus by reference only.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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An actuarial review of the Invensys Australia Superannuation Fund showed it to be in surplus to the tune of $189.2 million. In mid 2003, the Invensys Group proposed to the trustee that the surplus be repatriated to the principal employer in the group.
CIVs will have flow-through status for tax purposes and similar criteria as the MITs, to encourage foreign investment.
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