This archive report was first published on 24 September 2019.
On September 24, 2019, the Capital Markets Authority (CMA) issued new rules aimed at protecting investors by tightening regulations on entities seeking to raise funds from the public.
The regulations, which are in line with the regulator's securities offers and disclosure regulations of 2002, require entities to make mandatory disclosures, including audited financial statements and a three-year outlook on enterprise performance.
Business units will also be required to share their level of indebtedness with the CMA and disclose the intended use of acquired funds.
Additionally, issuers will be required to attach the pair of directors and shareholder approvals as part of the supporting documents in their application for new capital issues.
According to the private investor prospectus checklist, entities must state the principal assumptions upon which their forecast or estimate is based, and where required, the forecast or estimate must be examined and reported on by the reporting accountants or auditors.
The new rules come as the CMA has been flagging suspect capital raising initiatives, and are intended to make it harder for entities to source public funds without requisite oversight.
