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| Prospectus Functions and Requirements |
| Prospectus Functions |
Offers to the public to invest in a public company must be made by way of a prospectus. |
In general, the function of a prospectus is to disclose to potential investors and advisors sufficient information regarding the financial position of a company and the nature of the securities on offer, so that they are able to make an informed investment decision. |
| A legally compliant prospectus should not be regarded as a guarantee of the financial stability of a particular corporation. Investors and their advisers are themselves responsible for evaluating the financial position and the prospects of the corporation. |
| Prospectus requirements and usage are heavily regulated by the Corporations Law. These requirements have been reviewed by the CLERP Act 1999. The CLERP amendments, which are designed to clarify and simplify prospectus procedures and minimise fundraising barriers for small to medium size businesses, took effect on 13 March 2000. |
| Types of Prospectus |
The CLERP amendments include provision for prospectuses to take a variety of forms:
- Prospectus
The standard full-disclosure document.
- Short form prospectus
Refers investors to information in the material lodged with ASIC rather than detailing it in the prospectus itself. Investors are entitled to a copy of this material upon request.
- Profile Statement
A profile statement for an offer may, with ASIC approval, be prepared in addition to the prospectus and sent out to potential investors. A copy of the prospectus will be provided to interested investors upon request. Profile statements will enable investors to compare similar products.
- Offer information statement
May be used instead of a prospectus with respect to fundraisings of up to $5 million.
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| Prospectus Lodgement and Registration |
Disclosure documents to be used for an offer of securities must must be lodged with ASIC. |
Prospectus Content |
All prospectuses must be drafted in accordance with the content specifications set out in ss 710-714 of the Corporations Law. |
