A lawyer says the Financial Markets Authority's guidance about pre-prospectus publicity is clarifying an out of date area of the law.
The FMA is trying to stop investors being unduly influenced by information selectively provided to the market before the prospectus or investment statement is available.
It says authoritative disclosure documents for any offer to the public should be the registered prospectus and the investment statement.
The authority says this will ensure decisions are not made without investors being given the opportunity to fully consider the products they might invest in.
Corporate partner at Chapman Tripp, Roger Wallis, says times have changed and this should bring the law up to speed.
"One of the real pressures that comes on for issuers that are seeking to go to the market is in the period just ahead of the prospectus, when they want to let people to know they're planning to raise capital, but the laws are actually quite strict and make it very difficult for issuers to know where the boundary lines are on what's permitted to be said about what you're planning to do."
Mr Wallis says the guidance is useful to provide issuers with information about where the authority believes the boundary line is.
The FMA will permit some limited pre-prospectus publicity and advertising which Mr Wallis says is a practical move.
The changes will come into force when the Financial Markets Conduct Bill is enacted.
