Mandated line item disclosure requirements may not be appropriate for some kinds of offerings, such as private offerings limited to professional investors that have the sophistication to know what information to demand and the economic strength to negotiate to obtain such information. 2.1.2 - Listing for Trading on a Public Securities Market When a public securities market approves the trading of securities of an enterprise on its market, specific disclosures should be made available to allow investors to make informed trading decisions. When securities are held by significant numbers of investors, some jurisdictions mandate specific disclosures even if no public offering of securities has been made in the jurisdiction, and even if the securities are not listed on a public market, in light of the comparable information needs of investors in widely-held enterprises. 2.1.3 - Continuous Disclosure Enterprises that have listed securities or have offered securities to the public should continue to provide on a timely basis to investors information upon which to make an informed decision whether to buy, hold or sell the securities. Availability of current information is a key factor in the liquidity of the market for the security.
Liquidity enhances the number of participants in the market and increases pricing efficiency.
Updating should be required annually. Updating also should be required for material events. When investors are asked to exercise the voting rights of their securities, disclosure should be provided sufficient to make an informed decision on the question presented. The analysis should include a discussion of known facts, trends or contingencies that are likely to have a consequence on future results, financial condition or cash flow. In essence, this analysis should explain the extent to which the historical financial statements are indicative of the enterprise's prospects.