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Disclosure documents need to improve

Page last updated: 30 Oct 2013

News release
30 October 2013

A report by the Financial Markets Authority (FMA) into prospectuses and investment statements (disclosure documents) highlights the need for issuers to lift their game.

The report comes more than a year after FMA released its Guidance Note on Effective Disclosure which explains the approach FMA will take to reviewing disclosure documents for compliance with the law.

The Guidance Note encourages issuers to set out information in a clear, concise and effective way to assist investors to make investment decisions.

FMA Head of Primary Regulatory Operations, Simone Robbers, said while there were some positive signs, issuers have some way to go in providing better quality information to retail investors.

“The disclosure documents for initial public offerings (IPOs) were so long and dense that we doubt many retail investors would have read them,” said Ms Robbers.

“FMA is concerned that such long documents may in fact have deterred members of the public from investing in the offers.”

Simone Robbers said the disclosure documents that FMA reviewed are unlikely to meet the requirements under the Financial Markets Conduct Act which comes into effect in 2014.

“Issuers who move now and produce documents that are clear, concise and effective will be much better prepared for the changes ahead.”

A copy of FMA’s report into Effective Disclosure can be found here.