A prospectus is a detailed document prepared by an issuer selling financial securities to the public. As per capital market regulations, it must provide complete, accurate, and plain disclosure of all-important facts relating to the securities being issued.
Prospectus helps the public access information to make sound investment decisions. Companies and mutual funds must prepare prospectuses, financial statements, and other public disclosure materials.
It gives information about a company or mutual fund, including products, management, financial and strategic planning, and risks. Reading a prospectus is the first step to becoming an informed individual.