The Australian Securities and Investments Commission (ASIC) has issued updated guidance on product disclosure statements (PDS) following a period of industry consultation.
“Regulatory Guide (RG) 168 Product Disclosure Statements: Disclosure and other obligations” is designed to provide product issuers with guidance on preparing a PDS that complies with the Corporations Act 2001, along with explaining how ASIC will monitor and enforce these requirements.
The updated guidance includes more information on compliance risks and considerations to clarify what happens if the PDS requirements in Section D are not met.
This includes defining when ASIC may issue a stop order for a PDS, such as when it is “defective”, that is, contains a “misleading or deceptive statement”, or it omits information required to be provided under legislation.
A stop order may also be issued if a PDS does not comply with the requirement it be worded or represented in a clear, concise or effective manner.
“We have amended the wording to explain that Section D discusses compliance risks for a PDS and that we may take enforcement action when PDS requirements are not complied with,” ASIC said in a summary of the feedback to the consultation and its subsequent responses.
The updated guidance also makes reference to relief instruments that stakeholders had indicated were useful in the consultation.
“We may grant relief to allow a product issuer to use a transaction-specific PDS if the relief will not have a materially adverse effect on the level of information available to the market,” the new RG 168 said.
In issuing the updated RG 168, ASIC has withdrawn six other guidance and information sheets, which are now incorporated into RG 168. These include: Information Sheet 94 Notification requirements for Product Disclosure Statements (INFO 94), Information Sheet 155 Shorter PDSs – Complying with requirements for superannuation products, simple managed investment schemes and simple sub-fund products (INFO 155), and RG 65, 67, 197 and 219.
