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FMA releases revised draft disclosure guidance note

BUSINESSDESK: The Financial Markets Authority has released an updated draft on its preference for how companies should prepare offer documents and is seeking more feedback before settling on a final version.

Chief executive Sean Hughes said submissions from the first-round had been constructive, and the revised guidance note has been changed to emphasise that it is for reference purposes only and not a binding document.

The note will help issuers and directors assess what they should include in offer documents.

“Effective disclosure is a cornerstone of fair, efficient and transparent markets,” Mr Hughes said.

“Our final guidance note needs to be based on a sound understanding of market fundamentals and commercial realities.”

The FMA, which replaced the Securities Commission as the super-regulator of financial markets last year, put out the consultation paper in January to gauge what the industry thinks should be minimum disclosure requirements for offer documents.

That comes as the government overhauls securities legislation with the Financial Markets Conduct Bill, which passed its first reading last month.

The initial consultation document included proposals that would give all existing issuers until the end of the year to get their offer documents in order, while new investment statements would need to comply from May 1.

The FMA also urged the use of "plain English", while discouraging the use of pictures and brand imagery unless it was necessary to explain the offer.