Managers preparing a first fund often assume a Product Disclosure Statement is simply what you produce when you raise money. It isn't. A PDS is a retail disclosure document, and most wholesale funds never need one. What they use instead is an information memorandum — a document with no prescribed form at all. Knowing which one applies to you is worth getting right early, because the answer changes your entire compliance load.
Which document you need turns on who your investors are. A PDS is required when a financial product is offered to retail clients — its content and delivery are prescribed by the Corporations Act and ASIC guidance. If every investor is a wholesale client, a PDS is generally not required, and the fund is offered using an information memorandum instead. An IM isn't a regulated disclosure document and has no prescribed format — but it still must not be misleading or deceptive, and in practice investors expect it to cover the strategy, structure, fees, risks and terms.
The question that decides it
There is really only one: will any investor be a retail client?
Disclosure obligations in Chapter 7 of the Corporations Act attach to offers made to retail clients. A person is a retail client unless they satisfy one of the wholesale limbs — a $500,000 investment, an accountant's certificate for $2.5m net assets or $250k income, professional investor status, or a business that isn't a small business. We cover those in full in retail vs wholesale clients: who qualifies.
Retail investors → PDS territory. Wholesale investors only → information memorandum.
Note what doesn't decide it: the size of the fund, the amount raised, the number of investors, or whether the fund is listed. Those matter for other things — but not for this.
What a Product Disclosure Statement is
A PDS is the disclosure document given to a retail client when a financial product is offered. It's a regulated document: what it must contain, and how and when it must be given, are set by the Corporations Act and ASIC's guidance in RG 168 Product Disclosure Statements: Disclosure and other obligations.
Broadly, it exists so a retail investor can make an informed decision, and it's expected to address the product's key features and benefits, its risks, the fees and costs, and how to complain or exit. Preparing one properly is a serious exercise — and it rarely travels alone. A retail offer typically also brings:
- a registered scheme and a responsible entity;
- a Target Market Determination under the design and distribution obligations;
- AFCA membership; and
- retail authorisations on the AFS licence.
That bundle is the real cost of going retail — not the document itself.
What an information memorandum is
An information memorandum (IM) is the offer document used to present a wholesale fund to wholesale clients. The key thing to understand: it is not a regulated disclosure document. There's no prescribed content, no prescribed format, and no statutory requirement to produce one at all.
So why does every wholesale fund have one? Because investors expect it, and because it's the practical way to set out what you're offering. In practice an IM usually covers:
- the strategy and what the fund invests in;
- the structure — the vehicle, the trustee and issuer, the manager, and how they relate;
- fees — management, performance, and any others;
- risks, stated honestly and specifically to the strategy;
- liquidity, redemption and distribution terms;
- the application process, including how wholesale status will be evidenced.
PDS vs IM at a glance
| Product Disclosure Statement | Information memorandum | |
|---|---|---|
| Who it's for | Retail clients | Wholesale clients |
| Required by law? | Yes, for retail offers of a financial product | No — used by convention and investor expectation |
| Prescribed content | Yes — Corporations Act and RG 168 | No prescribed form |
| Scheme registration | Generally required | Generally exempt if all investors are wholesale |
| Responsible entity | Required | Not required — a trustee operates the scheme |
| Target Market Determination | Required | Generally not required |
| Misleading conduct rules | Apply | Apply equally |
The mistake to avoid
The expensive error isn't choosing the wrong document — it's letting a retail investor into a fund built on the wholesale assumption. Do that and the retail regime can be triggered retrospectively: registration, a responsible entity, a PDS, a TMD, AFCA, retail authorisations. None of which you have.
The protection is procedural, not documentary: confirm and document wholesale status before the offer is made, and keep the evidence. An accountant's certificate is only valid for two years — a detail that quietly catches funds out, and one we cover in the wholesale client test.
Where an integrated platform fits
Getting the offer document right is one part of standing a fund up; the licence, the trustee and the scheme structure around it are the rest. Providence Equity Holdings acts as trustee, issuer and operator of the wholesale scheme and provides the compliance and operational framework, while you're onboarded as an authorised representative to run the strategy. → Managed Scheme & Trustee Infrastructure
The IM itself is yours — drafted with your legal adviser, reflecting your strategy and terms. What we remove is the licensing and scheme layer underneath it.
Frequently asked questions
Do I need a PDS or an information memorandum?
It depends on who your investors are, not the size of your fund. A PDS is a retail disclosure document, required when a financial product is offered to retail clients. If every investor is a wholesale client, a PDS is generally not required, and the fund is offered using an information memorandum instead. An IM isn't a regulated disclosure document, so its form isn't prescribed — but it must still not be misleading or deceptive.
What is a Product Disclosure Statement?
A Product Disclosure Statement (PDS) is the disclosure document given to retail clients when a financial product is offered. Its content and delivery are prescribed by the Corporations Act and ASIC guidance, including RG 168. It's expected to cover the product's key features, benefits, risks, fees and costs so a retail investor can make an informed decision.
What is an information memorandum?
An information memorandum (IM) is the offer document used to present a wholesale fund to wholesale clients. Unlike a PDS it isn't a regulated disclosure document, so there's no prescribed format. In practice it covers the strategy, structure and vehicle, the trustee and manager, fees, risks, liquidity and redemption terms, and how to apply. It must not be misleading or deceptive.
Is an information memorandum a legal requirement?
No. There's no statutory requirement to produce an IM for a wholesale fund. It's used because investors expect it and because it's the practical way to present the offer, terms and risks. Its content isn't prescribed — but the general prohibitions on misleading or deceptive conduct still apply, so accuracy matters just as much.
What happens if a retail investor is offered a wholesale fund?
The retail regime can be triggered: the scheme may have to be registered, a responsible entity required, a PDS prepared and given, a Target Market Determination produced, plus AFCA membership and retail licence authorisations. This is why wholesale status should be confirmed and documented before the offer is made.
Does a wholesale fund need a Target Market Determination?
Generally no. A TMD is part of the design and distribution obligations attaching to retail product distribution, and a fund offered only to wholesale clients is generally outside that regime. As always the position is fact-specific — confirm it for your product and investor base.
Related reading: Retail vs wholesale clients: who qualifies — the tests that decide which document you need. How to set up a wholesale fund — where the offer document fits in the process.
Sources & further reading (ASIC)
This page draws on guidance published by ASIC. For the authoritative position, see:
- RG 168 Product Disclosure Statements: Disclosure and other obligations — what a PDS must contain and when it must be given
- How to register a managed investment scheme — the registration test and the wholesale-client exemption
- Running a registered scheme — the responsible entity obligations a wholesale fund avoids
- The wholesale client tests sit in the Corporations Act, principally sections 761G and 708
ASIC guidance is general and doesn't address your circumstances — confirm how it applies to you with your own adviser.