ASIC rewrites the rules on prospectuses

Hot on the heels of its proposed guidance for infrastructure prospectuses and use of non-complying financial information, ASIC is proposing a radical rewrite of prospectuses in general.

A proposal released yesterday afternoon aims to change both the form and, to some degree, the contents of all prospectuses.

Under the proposal, ASIC uses the statutory requirement for "clear, concise and effective" prospectuses as a springboard for the development of guidance on the structure and content of prospectuses. This guidance would also affect other fundraising documents, as well as takeover documents.

"Clear, concise and effective"

Since 2004, prospectuses and other equity fundraising documents have been required to be "clear, concise and effective" (section 715A). However, there has been little agreement or direction on exactly what this means in the context of prospectuses. Of course there has been no shortage of guidance from ASIC on what "clear, concise and