International Disclosure Standards for Crossborder Offerings and Initial Listings by Foreign Issuers
These International Disclosure Standards have been issued by IOSCO, with a recommendation that IOSCO members accept in their respective home jurisdictions a disclosure document containing the information set forth in the Standards. Additional actions may be needed in some jurisdictions to implement the Standards, and issuers are encouraged to verify that the Standards are in effect in the host country jurisdiction prior to their use. The International Disclosure Standards provide alternative standards for the preparation of a single disclosure document by foreign issuers, but do not necessarily replace a jurisdiction's existing disclosure requirements for foreign or domestic issuers or preclude foreign issuers from complying with those existing requirements if permitted by the host jurisdiction.
Part I sets out International Disclosure Standards for use by companies in connection with cross-border public offerings and listings of equity securities. The Standards apply to listings and public offers and sales of equity securities for cash. Unless otherwise indicated, the Standards are intended to be used for prospectuses, offering and initial listing documents and registration statements. Companies engaged in specialised industries (i.e., banking, insurance, mining and oil and gas companies) may be required to provide additional information in certain countries, and the sources of these requirements are set forth in Part II.
Part II also illustrates information of a general nature and other disclosure requirements that may apply in certain countries. The disclosure requirements for certificates representing shares, such as depository receipts, voting trust certificates or similar forms of ownership representation, are referenced in Part II. Companies should review the disclosure requirements in any jurisdiction in which they plan to offer or list securities to determine whether there are additional requirements similar to those referenced in Part II or whether any of the current Part II requirements have changed.
The International Disclosure Standards relate to non-financial statement disclosure requirements and do not address the issue of which bodies of accounting or auditing principles may be followed by the issuer in preparation of its financial statements. The Standards do not address disclosure requirements that may apply in some countries in connection with other types of transactions, such as business combinations, tender offers, exchange offers, "going private" transactions or interested party transactions. The Standards also do not apply to collective investment schemes, or to "start up" companies with no history of operations. The Standards do not address continuous reporting disclosure mandates which may arise, for example, out of insider trading laws, requirements to disclose material developments or antifraud prohibitions. The Standards also do not address suitability criteria that may be imposed by stock exchanges in connection with listings of equity securities, such as the company's operating history, asset size, profitability, market float, share price, etc.
An offering or listing of securities is considered to be "cross-border" when it is directed to one or more countries other than the company's home country (whether or not the offering or listing also is being made concurrently in the company's home country). Generally speaking, therefore, in a particular host country the International Disclosure Standards can be applied to offerings or listings by all foreign companies, with the exceptions set out in the document.
In addition to the specific disclosures described, most countries rely on an overriding principle that, in connection with a registration or listing of securities or a public offering of securities, a company should disclose all information that would be material to an investor's investment decision and that is necessary for full and fair disclosure. Thus, information called for by specific requirements contained in these Standards may need to be expanded under this general principle, where supplemental information is deemed to be material to investors and necessary to keep the mandated disclosure provided pursuant to specific requirements from being misleading. The formulation of this general principle varies somewhat in different countries, and a more detailed description is set forth in Item I of Part II.