The Australian Securities and Investments Commission (ASIC) has confirmed that the use of electronic disclosure documents is permitted under law, and has released guidance on how offer documents for securities may be distributed online.
The changes, which follow ASIC’s consideration of how the internet could be used to facilitate the distribution of offer and disclosure documents, update previous regulatory guides in this area.
ASIC stated it made the changes after recognising “there are many advantages to using the internet and other electronic means to distribute disclosure documents and application forms, which can make information easier to access, read and understand for investors”.
Under the new regulations, continued relief for the use of personalised or Australian Financial Services Licensee-created application forms has been provided, alongside the use of electronic disclosure documents.
The updated Regulatory Guide 107 'Fundraising: Facilitating electronic offers of securities’ details a 'good practice guide’ for those involved in offering securities including 15 principles, which ASIC states will apply to offers via electronic communications.
These include electronic disclosure documents being distributed in a way that does not unreasonably expose investors to security risks, as well as paper versions of each electronic document being freely available on request by investors.
Investors should also be able to keep a copy of an electronic disclosure documents. Copies of all electronic
disclosure documents should be kept by offerers, distributors and publishers so that investors can prove which version of the disclosure document they relied on.
ASIC Commissioner John Price said that investors had increased their use of the internet and electronic devices to receive important information. He said ASIC’s regulation changes both reflected these changes but also ensured companies and investors were complying with the law.
“Consistent with our focus on confident and informed investors, our good practice guide aims to encourage disclosure in a way that promotes investor confidence.”
