Section 31 of CA 2013 : Section 31: Shelf Prospectus

Explanation using Example

Imagine a tech company, "FutureTech Innovations Ltd.," planning to raise funds through the issue of bonds over the next year. To streamline this process, they opt to file a 'shelf prospectus' with the Registrar of Companies, as permitted by the Securities and Exchange Board's regulations. This shelf prospectus is valid for one year and covers multiple bond offerings without the need for a new prospectus for each issue.

After the first bond issue, FutureTech's financial position changes due to a significant acquisition. Before they can issue more bonds under the same shelf prospectus, they must file an 'information memorandum' detailing the acquisition's impact on their finances, any new charges created, and other relevant changes, to keep investors informed.

If an investor had paid for bond subscriptions before these changes were made public, FutureTech would need to inform them about the updates. If the investor decides to back out, FutureTech is obligated to refund their money within fifteen days.

Each time FutureTech makes a new bond offering within the year, the information memorandum and the original shelf prospectus together are treated as the current prospectus for that offering.