Letter to the editor - Australian Financial Review, 3 December 2014

3 December 2014
Letters to editor
'Australian Financial Review'
Delivery by email: edletters@afr.com.au

Letter to the editor - Australian Financial Review, 3 December 2014

Lodgement of a prospectus with ASIC is just one step in the process for a company to raise money from the public and list on a stock exchange...

The fact that a prospectus is lodged with ASIC does not mean that ASIC 'approves' or 'endorses' the nature of a particular company's business plan or investment scheme in any way ('Pot stock gets green light to list from ASIC', AFR, November 29). The Phyto Tech prospectus to which your article refers makes this very point.

While all prospectuses are lodged with ASIC before shares are offered to the public, we use a risk-based approach to decide which ones to review. If reviewed, we want to see if the prospectus' disclosure complies with the law - ensuring that major risks are disclosed, the prospectus is presented in a clear, concise and effective manner.

ASIC’s role is not to make a decision about the merits of an offer. Investors should do this after considering the disclosure in the prospectus.

John Price
Commissioner, Australian Securities and Investments Commission
Melbourne, Vic

The Australian Financial Review published an AFR-edited version of this letter on 3 December 2014.