Fund managers must give people copies of their prospectuses when they ask for them - even if they are competitors.
The Securities Commission says some managers aren't giving out prospectuses when requested and these firms are breaking the law.
Currently the penalty under the Securities Act is a fine of up to $10,000. However, that may rise with legislation currently going through Parliament.
Commission executive chairman Jane Diplock says it has had a number of complaints about prospectuses.
"We have been concerned that people have been complaining to us that it's been difficult to get offer documents."
Consequently it did a survey asking financial institutions for copies of their offer documents, including investment statements and registered prospectuses.
"Invariably in response to our first request we received only an investment statement. When we have made repeated requests and received a registered prospectus it is unlikely to contain or be accompanied by appropriate financial statements."
Good Returns has also heard of a number of cases where managers have been reluctant to provide prospectuses, especially to competitors. This is often the case when someone rolls out an innovative (read tax effective) fund.
One manager involved such a fund says it is his job to make life as difficult as possible for his competitors, hence he won't give them a prospectus.
Diplock disagrees with this. She says competitors are members of the public and the must be given the information they ask for.
"What we're doing here is warning companies that they should have those documents absolutely ready if someone puts in a request
"We take this quite seriously," she says. "This is really a flag to the industry that if they don't provide these documents we will take action."
Tower Managed Funds general manager risk and investment products in New Zealand Richard Baker says he has had a number of prospectus requests for it's new Advantage Hedge Fund."We always make the offer documents available when people request them," he says.
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