By Aimee Chanthadavong

Australian Securities and Investments Commission (ASIC) is proposing an overhaul of prospectuses; a first in five years.

According to ASIC, the changes will make prospectuses easier for retail investors to use and would improve the quality of information on the proposed business model and the associated risks.

A Fairfax report has speculated that the release of the consultation paper comes following Myer’s marketing material that features too many pictures of Jennifer Hawkins.

However, an ASIC spokesperson told RetailBiz that it has made no comments in regards to any individual company.

“ASIC has undertaken extensive consultation in arriving at the proposals that it has made public and it has drawn on consumer research,” the spokesperson said.

“Over the last 12 months, ASIC has conducted a project to identify the difficulties that issuers have when preparing prospectuses and the difficulties that retail investors face when reading prospectuses.”

Shortcomings outlined under the proposal include that prospectuses are long and complex and the front sections of a prospectus are often ineffective and have a high ratio of marketing statements and photographs.

ASIC commissioner Belinda Gibson said in a statement that the proposals – which are subject to consultation with industry – were aimed at ensuring the focus of prospectuses is high-quality information that investors can understand, and which gives investors a full picture of the offer.

Consultation with industry on the proposals in the paper will continue until 7 June 2011, after which ASIC will issue a new regulatory guide – taking into account the results of the consultation.