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LAWYERS // TAX ATTORNEYS // ARUBA – BONAIRE – CURAÇAO – ST. MAARTEN

THE NATURE OF A PROSPECTUS

A prospectus should be prepared with the highest standard of care

A Netherlands Antilles based investment fund may offer shares in its capital to investors by means of a prospectus. A prospectus is a.k.a. e.g., an offering memorandum, private placement memorandum (PPM) or an explanatory memorandum. The prospectus aims at informing the target market as well as protecting investors.

The prospectus contains details a.o. about the (structure of the) fund, the investment policies, risk factors, the shares offered, selling restrictions, the redemption or repurchase of shares, tax issues, the calculation of the net asset value (NAV) and fees and costs. Also important is the disclosure of information with respect to all parties involved, including their relationships.

A prospectus should give a clear view of these issues and may not be misleading. Said aspects (may) play an important role when reviewing an investment fund and especially when assessing whether or not investments should be made in such fund. A prospectus should be prepared with the highest standards of care and accuracy.

Details on e.g. a redemption request can also be found in the articles of association of the fund. It is not unusual that the requirements which must be met by a redemption request are set out in both the prospectus and the articles of association.

Karel Frielink
Attorney (lawyer) / Partner