Singapore, 5 February 2015... The Monetary Authority of Singapore (MAS) issued for consultation today guidelines on good drafting practices for prospectuses.  These drafting guidelines aim to encourage the use of plain English and presentation of information in prospectuses in a clear, concise and logical manner.

2.             MAS also issued its response to feedback received during its public consultation on proposals to improve the readability of prospectuses and help investors better understand  key information presented in prospectuses. The proposals include:

(i)            extending the requirement for a product highlights sheet to offers of debt securities, hybrid instruments and equity securities¹;

(ii)           allowing  information outside the prospectus to be incorporated  by reference; and

(iii)          developing a regulatory guide to encourage good drafting practices for prospectuses.

Please click here to view MAS' response to the feedback received. 

3.             MAS has carefully considered the feedback received and also engaged respondents who provided constructive suggestions during the public consultation period.  MAS thanks all respondents for their comments and will proceed with the consulted proposals taking into consideration the feedback received. 

Product Highlights Sheet for offers of debt securities, hybrid instruments and equity securities (PHS)

4.             Respondents generally supported the proposal to extend the PHS requirement to debt securities, hybrid instruments and equity securities as it would facilitate clearer and more effective disclosures to help investors make informed investment decisions.  To provide issuers and advisers with more flexibility in drafting the PHS, MAS will revise the page limits as follows:

• For offers of debt securities: The page limit for the PHS will be a flat limit of 12 pages (where the offer is made in a prospectus), or 8 pages (in a secondary offering by a listed issuer where the offer is made in an offer information statement)².
• For offers of hybrid instruments and equity securities: The page limit for the PHS will be a flat limit of 12 pages³.

5.             To facilitate the adoption of the PHS proposals by market practitioners and issuers, MAS will first implement the proposals through a set of guidelines for Offers of Debt Securities, Hybrid Instruments and Equity Securities” (“PHS Guidelines”) in conjunction with the consultation response. The PHS Guidelines will apply to offers of debt securities, hybrid instruments and equity securities for which prospectuses or offer information statements (where applicable) are submitted or lodged with MAS on or after 1 July 2015.  Please click here (1.28 MB) to view the PHS Guidelines.

6.             MAS will consider incorporating the guidelines relating to PHS into legislation after the market is familiar with the practice.

Incorporation by Reference

7.             Respondents generally welcomed the proposal for certain information outside a prospectus to be incorporated by making reference to the information.

8.             MAS will expand the type of information which may be incorporated by reference. This will include the list of directorships held by executive officers of the issuer in other corporations, expert reports, and information on relevant laws or regulations applicable to the issuer.  As this proposal will require amendments to the Securities and Futures Act, Chapter 289 (SFA), MAS will be consulting on the draft amendments prior to its implementation.

9.             Please click here to view the Guidelines on Good Drafting Practices for Prospectuses. Comments on the Guidelines should reach MAS by 13 March 2015.  Interested parties may email their comments to PartXIIISFA_SFR_amendments@mas.gov.sg .

¹ Currently, the PHS is only required for offers of investment products which are more complex in nature (namely, asset-backed securities, structured notes, unlisted collective investment schemes, and exchange-traded funds).

² The proposed page limit was 4 pages (or 8 pages including diagrams and glossary).

³ The proposed page limit was 8 pages (or 12 pages including diagrams and glossary).