Better information for investors as new disclosure documents take shape

Information for investors will now be provided in a format that is easier-to-understand and more accessible than before, a media release from the Financial Markets Authority says.

The way that financial products are made available to the public has been overhauled under the Financial Markets Conduct Act 2013 (FMC Act). The first New Zealand financial products to be offered under the new regulations have started to appear on the ‘Disclose’ website this month.

Companies providing financial products are now required to produce a Product Disclosure Statement (PDS) and lodge it on ‘Disclose’ when they make a new offer available to the public under the FMC Act.

‘Disclose’ is the new online register where all offers regulated by the Financial Markets Authority (FMA) can be found in the new regulatory environment. These offers include products such as shares, bonds, managed funds and derivatives.

A PDS provides investors with the essential information they need to help them decide whether to invest in a financial product. The document needs to use clear language to explain the product and it replaces the older forms of disclosure being investment statements and prospectuses. There are also mandatory page limits for the documents.
The FMA has published a guide on its website to help investors understand how the PDS works.

The FMA’s Director for Primary Markets and Investor Resources, Simone Robbers, says the new PDS and on-line register mark the latest steps in the improvement of offer information for investors in New Zealand.

“It’s now easier for investors to access and read the information they need before investing. We expect to see many more product offers appearing on ‘Disclose’ and using the benefits of the new regulations,” said Ms Robbers. “These changes are bringing to life some of the changes recommended in the government’s Capital Market Development Taskforce.”

Offers can still be made under the Securities Act 1978 until December 2016, but the FMA encourages issuers to use the PDS format and embrace the new framework and regulations of the FMC Act sooner rather than later.

View the ‘Disclose’ website.
Read the FMA’s Product Disclosure Statement guide.


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