MS. SARAH LIM                                           MR. NICHOLAS CHANG
Legal Associate (Corporate Practice)      Manager, Corporate Finance Department
T: (65) 6322 2254                                        T: (65) 6322 2236
F: (65) 6534 0833                                        F: (65) 6534 0833
E: sarahlim@loopartners.com.sg           E: nicholaschang@loopartners.com.sg

Loo & Partners LLP
143 Cecil Street, Level 10, GB Building
Singapore 069542
www.loopartners.com.sg

On 5 February 2015, the Monetary Authority of Singapore (“MAS”) issued, for consultation, a set of proposed guidelines on good drafting practices for prospectuses (“Guidelines”). The Guidelines aim to encourage the use of plain English and presentation of information in prospectuses in a clear, concise and logical manner.

Under the Securities and Futures Act (Chapter 289) of Singapore, a prospectus is required to contain all information investors and their advisers would reasonably require in order to make an informed investment decision. MAS observed that prospectuses have grown in length and are often drafted in a technical or legalistic manner which investors find difficult to read and understand.

MAS had previously issued a consultation paper in October 2013 on proposals to improve the readability of prospectuses in order to facilitate retail investors’ understanding of key information disclosed in prospectuses. The Guidelines are therefore a further step taken by MAS to ease the understanding of investment information for investors.

The general principles set out in the Guidelines are briefly as follows:

(i) Use active voice instead of passive voice, such as “We pay fees on an annual basis” instead of “Fees are paid on an annual basis”;

(ii) Avoid using hidden verbs, such as “We will offer the securities to the public” instead of “An offering will be made to the public”;

(iii) Use personal pronouns (direct language), such as referring the issuer in first-person plural as “we”, “us”, and “our”, and referring an investor in second-person singular as “you” and “your”;

(iv) Use plain, everyday words, such as “send” instead of “despatch”;

(v) Avoid using legal, financial or technical business jargons;

(vi) Use short sentences;

(vii) Write in the positive and avoid using multiple negatives, such as “We will reject applications from any persons under the age of 21 years” instead of “We will not accept applications from any person who has not attained the age of 21 years”;

(viii) Avoid using defined terms excessively;

(ix) Avoid using vague boilerplate disclosures;

(x) Avoid “cutting and pasting” contractual terms in its entirety from legal documents;

(xi) Present information in a clear, concise and logical manner; and

(xii) Keep the length of the prospectus as short as necessarily possible by removing redundant information and using cross-references to information contained elsewhere in the prospectus. Issuers and practitioners are encouraged to adopt the Guidelines when preparing prospectuses and other disclosure documents.