AUSTRALIA: ASIC updates guidance for historical financial information disclosure in prospectuses

Friday November 4 2016

The Australian Securities and Investments Commission (ASIC) has released updated regulatory guidance to assist companies and their advisers to improve the quality and quantity of historical financial information disclosures in prospectuses as part of their disclosure obligations.

ASIC’s updated Regulatory Guide 228 Prospectuses: Effective disclosure for retail investors (RG 228) follows a consultation launched in May 2016 (16-137MR).

The updated guidance provides additional clarity on ASIC’s disclosure expectations and describes:
• the level of disclosure expected for business acquisitions and asset acquisitions
• the types of audit and review opinions that are generally considered appropriate
• when historical financial information requires updating in a prospectus;
• when cash flow information should be included in prospectuses, and
• the circumstances where historical financial information disclosures may not be required.

ASIC has, in relation to business acquisitions, introduced a ‘significance’ threshold. RG 228 now provides that where an acquisition is significant (25 per cent of the company), issuers will generally need to disclose audited historical financial information on the acquired business.

ASIC is willing to engage in pre-lodgement discussions with companies currently preparing fundraising offerings, who are potentially affected by changes in the guidance, to help facilitate the transaction.

Click the link at the top of the page for further information.