ASIC relieves pressure on PDS accuracy

TheAustralian Securities and Investments Commission(ASIC) has responded to industry concerns about the need to regularly prepare supplementary product disclosure statements (SPDS) to update a product disclosure statement (PDS) where there have not been material adverse developments.

ASIC has released a new Class Order exemption relating to s1012J of the Corporations Act 2001, which in effect exempts issuers of PDSs from the requirement to ensure a PDS is up to date at the time when it is given, provided that the up to date information is made available through a web site, a toll-free telephone service, or another service which provides convenient access for investors.

However the exemption applies only where the update does not include adverse information.

ASIC hopes the exemption will alleviate concerns about possible compliance failure where a PDS does not contain the most current information, remove a perceived barrier to disclosure of performance information in a PDS, and respond to industry concerns about the additional costs of preparing, printing and distributing SPDSs to their advisory networks to update information that changes quickly.

ASIC’s executive director of financial services regulation Ian Johnston says, “If they choose, an issuer will be able to avoid the uncertainty of s1012J by putting in place a mechanism by which investors may conveniently obtain up-to-date information about matters that can change quickly, such as performance information, size of funds under management, or market movements which could impact on investment decisions”.