On 7 July 2015, the Monetary Authority of Singapore (the “MAS”) issued its guidelines on good drafting practices for prospectuses and profile statements required under the Securities and Futures Act (the “Guidelines”). This followed an earlier public consultation conducted by the MAS on a draft version of the Guidelines in February/March 2015.
The Guidelines are intended to:
- Provide guidance to issuers and their professional advisers by alerting them to common drafting problems and suggesting good drafting practices;
- Make prospectuses and profile statements more readable; and
- Allow investors to better understand the key information disclosed in prospectuses and profile statements.
The Guidelines will take effect and apply to all prospectuses and profile statements lodged with the MAS on or after 1 February 2016.
Content of the Guidelines
The Guidelines are based on three general principles:
- Use plain English;
- Present information in a clear, concise and logical manner; and
- Keep the length of the prospectus as short as possible.
Specific practices arising out of these principles, as well as examples of their application, are set out in the Guidelines for the consideration of issuers and their advisers.
Application of the Guidelines
The Guidelines represent “best practice standards” on how issuers and their advisers should draft prospectuses and profile statements. While a failure to comply with the Guidelines will not attract criminal or civil liability, issuers and their advisers are encouraged to observe the spirit of the Guidelines. In reviewing a prospectus submitted to the MAS for registration, the MAS may ask issuers to amend parts of a prospectus that a lay person is likely to find difficult to read or understand; and a poorly drafted prospectus may therefore lead to a delay in the registration of the prospectus.
Issuers and their advisers are also encouraged to adopt the principles in the Guidelines for other offer disclosure documents such as offer information statements, product highlights sheets and information memoranda wherever possible.
The Guidelines will not apply retrospectively to existing disclosure documents lodged with the MAS, nor to any replacement or supplementary document to an existing registered prospectus that was not subject to the Guidelines.
For further information on this development from the MAS website www.mas.gov.sg, please click on the links below:
- Guidelines on Good Drafting Practices for Prospectus
- MAS Response to feedback received from the public consultation on the draft Guidelines