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FMA publishes revised draft guidance on effective disclosure

Media Release
5 April 2012

The Financial Markets Authority today published their revised draft guidance note for issuers, directors and advisers on preparation of effective disclosure documents.

Following publication of the first draft guidance in late January, FMA has engaged with industry and consumer groups and received more than 60 submissions. As a result of that feedback, the second draft guidance note is markedly different to the first. FMA is now seeking further high level feedback from interested parties before it is finalised.

FMA CEO Sean Hughes said submissions from the first round had been constructive and well thought through, and acknowledged the investment of time and resource by market participants in the consultation process.

"Effective disclosure is a cornerstone of fair, efficient and transparent markets. Our final guidance needs to be based on a sound understanding of market fundamentals and commercial realities.

"Issuing guidance is just one of the ways that FMA can be transparent and share our intended approach with the market.

"We are asking interested parties to let us know of any remaining substantive issues so we can build on the many constructive suggestions we received in the first round."

The revised document clarifies that the guidance does not change or add to existing legal requirements. It seeks to help issuers comply with those requirements, and have confidence that they understand the FMA's approach, including how it will interpret and apply the law relating to their responsibilities.

Changes have also been made to emphasise that the guidance is not a compliance 'check list' and that not every example given will be relevant to every offer. The guidance emphasises the importance of issuers and their directors assessing what information will be material to an investor's decision about whether or not to invest.

Interested parties are invited to provide feedback on the revised draft guidance to consultation@fma.govt.nz by 5pm on Thursday, 10 May 2012.

FMA aims to publish final guidance by 31 May 2012.

The revised draft guidance can be found here. FMA's response to the key themes raised by submitters, can be found here.

Ends

Contact:
Nick Stride 021 739 052