Incorporation by Reference into Prospectuses : What are the Rationales?

A current securities regulation issue concerns the incorporation, by reference, of documents into prospectuses. The Australian federal government and the Australian Securities Commission have each advanced proposals dealing with this issue. The two proposals are outlined and then a series of rationales for allowing incorporation by reference are evaluated. These rationales include reduction of costs associated with prospectuses, verification of disclosure, and reliance upon informationally efficient markets