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FMA to issue guidance on effective disclosure in offer documents

Page last updated: 26 Jan 2012

Media Release
26 January 2012

The Financial Markets Authority today published draft guidance for securities issuers, directors and their advisers on how to prepare and present effective prospectuses and investment statements.

CEO Sean Hughes said FMA welcomed comments and suggestions from interested parties before the guidance is finalised.

"Effective disclosure is one of the fundamentals of fair, efficient and transparent financial markets. It enhances investor confidence and drives participation in capital markets, which in turn contributes to a more robust economy.

"In issuing guidance the aim is to ensure that financial markets participants clearly understand their responsibilities, and that investors have what they need to make informed decisions.

"Prospectuses and investment statements need to be concise, effective, and contain clear information. Disclosure documents should give equal prominence to both risk and return, and avoid undue promotion of what we would call 'headline returns'. To that end, the standards set out in the guidance note are designed to improve investors' ability to read and understand the offer"

FMA has published a consultation paper, with submissions due by 9 March.

Guidance will be finalised and published by 31 March 2012, and new offer documents will need to comply with the guidance from 1 May. Issuers with offer documents already in the market will have until late 2012 to ensure they comply.

The consultation paper can be found here.

Diane Maxwell 029 200 8194 diane.maxwell@fma.govt.nz