---
title: "Test prospective financial information against the reasonable-grounds guidance"
url: "https://ailawframework.com/practice/capital-markets-and-securities-ecm-dcm-and-disclosure/test-prospective-financial-information-against-the-reasonable-grounds-gu"
type: "task"
site: "AI Law Framework"
id: "A4-MO20261022-3"
practice_area: "Capital Markets & Securities — ECM/DCM and Disclosure"
tier: "yellow"
lawyer_review: "required"
last_reviewed: "2026-10-22"
---

# Test prospective financial information against the reasonable-grounds guidance

> From the draft disclosure document or product disclosure statement, list each forecast, projection or target, the period it covers, whether it concerns an existing business, and the assumptions papers the lawyer has…

Canonical page: https://ailawframework.com/practice/capital-markets-and-securities-ecm-dcm-and-disclosure/test-prospective-financial-information-against-the-reasonable-grounds-gu  
Last reviewed: 2026-10-22

Site index for agents: https://ailawframework.com/llms.txt

## Key facts

| Fact | Value |
| --- | --- |
| Practice area | [Capital Markets & Securities — ECM/DCM and Disclosure](https://ailawframework.com/practice/capital-markets-and-securities-ecm-dcm-and-disclosure.md) |
| Human involvement | Yellow: Lawyer and AI draft together |
| How AI is used | From the draft disclosure document or product disclosure statement, list each forecast, projection or target, the period it covers, whether it concerns an existing business, and the assumptions papers the lawyer has collected. Mark any figure that rests on a hypothetical assumption. Do not rewrite the disclosure. |
| What the lawyer must review | The lawyer decides whether there are reasonable grounds to include the information, whether a period longer than two years can be supported, and whether a hypothetical assumption makes the figure misleading. The lawyer decides what is included. |
| Written for / versions | 1 jurisdiction versions below |

## Checking plan

**Source-by-source verification**

Tie each figure to RG 170.16, 170.18 or 170.39 and to the assumption paper cited.

- What the AI does: From the draft disclosure document or product disclosure statement, list each forecast, projection or target, the period it covers, whether it concerns an existing business, and the assumptions papers the lawyer has collected. Mark any figure that rests on a hypothetical assumption. Do not rewrite the disclosure.
- What the lawyer does: The lawyer decides whether there are reasonable grounds to include the information, whether a period longer than two years can be supported, and whether a hypothetical assumption makes the figure misleading. The lawyer decides what is included.
- Who reviews: Responsible lawyer with competence in the matter
- Basis: Practical workflow informed by the linked primary sources; the traffic light and working checks are editorial guidance, not a court classification.
- Why: The level reflects what the work is, the consequence of an error, and how much of the output the lawyer must independently re-derive.

## Checks the lawyer makes

1. RG 170.16 says a disclosure document or PDS should only include prospective financial information if there are reasonable grounds, even if management uses the figure internally.
2. RG 170.39 says short-term estimates not exceeding two years, for an existing business, based on events or actions management reasonably expects, may establish reasonable grounds. A longer period is not covered by that sentence.
3. RG 170.18 says information based on hypothetical assumptions is likely to be misleading. Flag those assumptions for the lawyer.
4. The guide also applies to conduct under Corporations Act s 1041H. The lawyer, not the schedule, decides whether the figure is included.

## Notes

- The guide on the ASIC page is the 1 April 2011 issue. The lawyer confirms it is still the current guide before reliance.
- These are suggested working checks. Confirm the required checking with the responsible lawyer before work starts; the checking approach does not establish permission to use AI.

## Sources

- [ASIC Regulatory Guide 170](https://www.asic.gov.au/regulatory-resources/find-a-document/regulatory-guides/rg-170-prospective-financial-information) (checked 2026-10-22)
- [RG 170 PDF](https://download.asic.gov.au/media/1240943/rg170-010411.pdf) (checked 2026-10-22)

## Jurisdiction versions

| Jurisdiction | Level |
| --- | --- |
| [United States](https://ailawframework.com/practice/capital-markets-and-securities-ecm-dcm-and-disclosure/test-prospective-financial-information-against-the-reasonable-grounds-gu/united-states.md) | Yellow |

*Practice guidance for planning and review. Confirm current primary sources and the requirements of the actual matter. This is general information, not legal advice.*