'Complete lack of interest' in prospectuses

The Financial Markets Authority recently announced another round of consultation on the issue after receiving a large amount of feedback from securities issuers and fund managers on its draft guidance note.

Pathfinder Asset Management, in a joint submission with fellow boutique manager PIE Funds, said that in its current form the guidance note would be a "financially crippling burden" for boutiques, and that the FMA should focus its attention on investment statements because these are the documents that actually get read.

"We agree that the prospectus and investment statement can in theory be accessed by the same audience. However, in our experience in relation to managed funds a copy of the prospectus is rarely (if ever) obtained or
read," the submission said.

It said there was a "complete lack of interest" from both institutional and retail investors.  For example, of the documents Pathfinder has distributed for its Commodity Plus Fund, 97% have been investment statements and only 3% prospectuses.