ASIC business guidance on prospectuses

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Key Points

  • ASIC has released 'Regulatory Guide 228 Prospectuses: Effective disclosure for retail investor' in order to assist businesses in producing effective prospectuses
  • The Institute participated in the consultation process surrounding the guide earlier in 2011
  • ASIC has also provided guidance for the Australian public to assist individuals in understanding prospectuses.

In an effort to address problems the Australian Securities & Investments Commision (ASIC) has identified with prospectuses, ASIC released Regulatory Guide 228 Prospectuses: Effective disclosure for retail investor on 10 November.

The Regulatory Guide is intended to help businesses in developing their prospectuses, detailing a number of areas including:

  • Risks
  • Investment overview
  • Financial information.

The guide was finalised following industry consultation on a draft released in April. The Institute, alongside the other professional accounting bodies, contributed to the consultation process and issued a submission to ASIC on the draft proposal.

The Institute’s Manager of Chartered Accountants in Business, Karen McWilliams, says ASIC’s goal is to assist issuers in producing information that is clear, concise and effective.

'The inclusion of an investment overview will be valuable to investors in making their investment decision by identifying the key information. However, as noted in our submission, we are concerned about the prescriptive level of detail included in some areas,' Ms McWilliams says.

'Members who work in businesses need to be aware of the new requirements surrounding prospectuses to ensure they disclose all the relevant information about their organisations,' she says.

ASIC has also provided guidance for the Australian public to assist individuals in understanding prospectuses. This is available on their MoneySmart website.

Article last updated 22 November 2011

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