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PDS research - understanding investors' information needs

The FMA presented recently to packed audiences in Wellington and Auckland to INFINZ members and guests at Chapman Tripp’s offices on research into investors information needs and how issuers could improve disclosure, thanks Rob Sloan and team!

 Wanting detailed information about a company’s management and directors, and social responsibility information were the surprise findings from recent FMA research into how investors use product disclosure information.

Investors told researchers management information helped them understand how the company was led and operated. They will typically go beyond the product disclosure statement (PDS) to research this, using the company’s website and sources such as LinkedIn to check on the qualifications and background of management and directors.

Investors also want to know an investment product is backed by principles of social responsibility. This helps investors assess the relationship between a company and the communities it affects and is a factor in their decision making.

While PDSs are an improvement on previous forms of disclosure overall, some sections still need improvement. Financials are still overly complex, and risk sections are typically too broad and generic.

The detailed findings, including the FMA’s expectations for what issuers should do to improve their disclosure can be found in the report: https://fma.govt.nz/news-and-resources/reports-and-papers/research-papers/pds/

Slides of the FMA presentations are also attached.


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