ASIC delivers warning to IPO issuers

ASIC delivers warning to IPO issuers

ASIC has cautioned businesses involved in initial public offerings (IPOs) to ensure their marketing approach complies with the law.


Following a review of IPO marketing strategies conducted between October 2015 and March 2016, ASIC found a number of areas of concern, including access to information about an offer not being properly controlled.

Telephone and social media marketing was found to contain some oversight weaknesses, as well as weakness in ensuring the marketing material was kept up to date, ASIC found.

Additionally, care is needed when forecasting is used in communications or when investors of a particular background are targeted to ensure potential investors are not misled, the regulator commented.

 ASIC commissioner John Price said the way in which an IPO is marketed could influence potential investors.

“We are living in more innovative times where we are seeing new interactive methods of communication and marketing used in many corporate and commercial arenas, including taking a company public,” he said.

“While we embrace such innovation, we also want to remind firms and issuers to ensure that their marketing practices comply with the advertising and publicity restrictions in the Corporations Act.”

These findings follow the release of another ASIC review in July, which found poor due diligence practices and “misleading and deceptive statements” within the prospectuses of small- to mid-size issuer IPOs.

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