A proposal to improve disclosure for retail investors has been criticised by in-house lawyers as "far too broad and uncertain".
The Australian Corporate Lawyers Association (ACLA) has claimed Australian Securities and Investments Commission (ASIC) recommendations on levels of disclosure on previous criminal convictions for directors and key managers, and records of disciplinary action and involvement with insolvent companies would be time-consuming and difficult to handle with "due diligence".
The ASIC paper and draft regulatory guide seeks such disclosures in any jurisdiction within Australia or overseas (less than 10 years old) be included in prospectuses to help retail investors asses the risks and returns of an offer of securities and make informed investment decisions.
ACLA argued "disclosure of disciplinary action or criminal convictions of any nature" presented verification problems, while the disclosure of involvement with companies that have gone into external administrations for insolvency should be confined to a 10-year period.
ACLA agreed that prospectuses should be "as short as possible" and considered ASICs treatment of "balance" between disclosure and marketing in prospectuses to be appropriate.
The ASIC proposal Prospectus Disclosure: Improving Disclosure for retail investors was released in April for public comment and ACLA submitted its response last week.