How to Read a Prospectus
Prospectuses contain important material information to aid investors and analysts in making investment decisions.

Prospectuses are prepared whenever a company wants to issue securities or raise capital from the public e.g. through an initial public offering (IPO), a rights issue or issuing a debenture. It is also prepared when a unit trust fund is offered to investors.

The contents of a prospectus are regulated by law and must comply with the following guidelines:
initial public offering of shares - Prospectus Guidelines on Public Offerings (pdf)
rights issues - Prospectus Guidelines Abridged Prospectus (pdf)
debentures - Guidelines on Contents of Prospectus for Debentures (pdf)
unit trust - Prospectus Guidelines for Unit Trust Funds (pdf)

All prospectuses must be registered with the Securities Commission (SC) before it is distributed to the public. However, the approval of the SC does not mean that the SC recommends the securities issued. Investors are advised to read the prospectus carefully and seek professional advice.

The most common prospectus that an investor encounters is when a company makes an IPO of securities. That will be the focus of our coverage in the following topics:

What an IPO prospectus contains
What to look for in an IPO prospectus
Salient points in IPO disclosures
Definitions in a prospectus