ASIC’s has published Regulatory Guide 228 Prospectuses: Effective disclosure for retail investors (RG 228) to address problems ASIC has identified with prospectuses.

The guide sets out ASIC’s views on how to word and present prospectuses in a ‘clear, concise and effective’ manner as required by section 715A Corporations Act. It also sets out ASIC’s guidance to issuers and their advisers on how to satisfy the content requirements for prospectuses.

ASIC encourages issuers to reduce the length of prospectuses and only include photographs which are relevant.

Prospectuses must be lodged with ASIC. If it reviews a prospectus, it will consider RG228 and any other regulatory guide on disclosure that is relevant to the offer or the issuer. If ASIC has concerns with a prospectus, it may seek corrective disclosure and/or prevent the issue of securities under it.