FMA has been consulting on a new guidance note for securities issuers, directors and their advisers on how to prepare and present effective prospectuses and investment statements.
Following comments from stakeholders on FMA's initial consultation paper and draft guidance note released in January 2012, FMA released a markedly different draft of the guidance note for further consultation and has invited feedback on the revised draft by 10 May 2012. A copy of the revised guidance note is available here. For details of this revised draft and latest consultation see our earlier note: FMA consults on revised Effective Disclosure Guidance Note.
The draft guidance note explains the approach FMA intends to take to reviewing prospectuses and investment statements and also provides its views on good practice for preparing these disclosure documents. FMA is particularly keen to ensure that:
- the style and presentation of disclosure documents is clear so that investors want to read the documents and are less likely to be misled or confused when they do so;
- full consideration has been given by issuers and their directors, and disclosure has been made, of all matters that are likely to be material to an investor considering investing in the particular offer; and
- issuers and their directors are satisfied that disclosure documents are "holistically true" taking account of all the information available to them.
Under the current timeline, FMA proposes to use this guidance note from 1 June 2012 as part of its risk-based assessment of newly-issued disclosure documents (see further discussion of this in the item below). FMA is also encouraging continuous issuers to review their disclosure documents in light of the guidance note as soon as practicable, but continuous issuers do not have to update their disclosure documents until the next time they issue a new investment statement or register a new prospectus for the issue after 1 January 2013. This is an improvement on the initial draft guidance note which required continuous issuers to have updated all disclosure documents by 1 January 2013.
The guidance note will be subject to further change once the Financial Markets Conduct Bill is enacted.
FMA has also indicated that it will release guidance for securities offers promoted through advertisements (including websites) this year.