• Invites offers for sales of company’s securities; and • Prohibits companies from inviting deposits from public other than deposit invited by a bank and certificate of investment and certificate of deposits invited by a Non-Banking Finance Company Shelf-Prospectus:Single offering document allowing companies to make multiple offerings as disclosed in the offering document within a prescribed time and subject to prescribed conditions. Supplement to Prospectus:A supplement to the prospectus invites the general public for subscription of the security(ies) earlier offered to the public through shelf-prospectus. It also provides such information as prescribed by the Commission. Purpose of the Prospectus:The purpose of prospectus is to invite offers from public for the subscription or purchase of any securities of a company. The term “public” is if the company wants to issue securities to large number of people it has to offer this to the general public and the requirement of the law is to issue a prospectus along with such public offer of securities. Prospectus provides the readers with all the information required by them before making any investment decision or otherwise in the company. Approval of prospectus (section 87 and 88, Securities Act, 2015) The prospectus is issued, published or circulated with the approval of the Commission. The same condition also applies on shelf-prospectus or supplement to the prospectus. A prospectus approved by the Commission shall be valid for a period of sixty days from the date of such approval. In case of shelf registration approval for a period longer than sixty days may be approved by the Commission. The issuer or the offeror shall, not less than twenty one days before the proposed date of publication of the prospectus, submit a copy to the Commission for approval. Availability of prospectus (Section 88, Securities Act, 2015) The prospectus in its full text or in such abridged form, shall be published at least in one Urdu and one English daily newspaper. It shall not be published in the newspapers less than seven days or more than thirty days before the commencement of the public subscription. A sufficient number of copies of the prospectus, as approved by the Commission, shall be made available, free of charge, from the date of its publication in the newspapers till the closing of the subscription at the registered office of the issuer, with all the securities exchanges of the country, with all the bankers to the issue, the concerned share registrar, the concerned ballotter and the concerned credit rating agency, if any. Contents of prospectus (Section 89, Securities Act, 2015)#Primarily, the prospectus must contain sufficient material to enable any person to reach a decision on the investment in the securities of the company.#Formal document and needs approvals from the Commission and clearance from the stock exchanges as well because any security which is offered to the general public should be listed on stock exchange. #Regulators like, Commission, Stock exchange and Registrar ask the company about every fact written in or omitted from the prospectus, before approving the prospectus for issue to the general public. #Company to arrange and write the risk factors separately. Timing of prospectus:#The company may issue a prospectus at any point in time of its life. #If the company wants to issue shares to the public before commencement of business it can.#Company may not issue shares to the general public initially and start the business without involving the general public in the company, in such a case however company would be required to file a statement in lieu of the prospectus with the registrar before certificate to commence the business.#In future it can issue a prospectus and get the shares or debenture and list on stock exchange. Expert to be independent (Section 90, Securities Act, 2015)#A prospectus shall not contain a statement purporting to be made by an expert unless the expert is a person who is not, and has not been, engaged or interested in the formation or promotion or in the management of the company. E.g. banker, securities advisor, engineer etc. Expert’s consent to issue of prospectus with statement made by him (Section 91 Securities Act, 2015) A prospectus not to be circulated or published unless: • The expert has given, his written consent to the issue of the prospectus with the statement in the form and context in which it is included; and • There appears in prospectus a statement that the expert has given and has not withdrawn his consent. Criminal liability for defective prospectus (Section 92, Securities Act, 2015):A person commits an offence, who: • Makes a misleading, incorrect, untrue or deceptive statement in a prospectus; or • Omits information or a statement from a prospectus that Securities Act, 2015 or any rule or regulation made under Securities Act, 2015, requires to be included in the prospectus. Compensation for false or misleading prospectus (Section 93, Securities Act, 2015) Every offeror, issuer, director of an offeror or issuer or any person who has signed the prospectus shall be liable to pay compensation to any person who acquires any of the securities, in reliance upon the prospectus, to which the prospectus relates and suffers loss in respect of them as a result of any incorrect, untrue or misleading statement in the prospectus or the omission from it of any matter required to be included under Securities Act, 2015.