The disclosure-based regulation (DBR) has been the most dominant regulatory philosophy for primary securities markets worldwide for decades. The philosophy is based on a ‘myth’—that corporations aspiring to raise funds from the market will fully disclose the “whole truth” to the investing public. The assumption is that the public, despite a significant lack of financial literacy among the majority, will properly analyze and utilize the disclosed complex financial information in making their investment decisions. This unreasonable expectation has proven to be a myth rather than a reality during the last global financial crisis (GFC). Many economists predict that the next man-made GFC is not far away. Australia has recently modified its disclosure regime in a quest for a better consumer outcome based on consecutive two financial system inquiry reports and corresponding recommendations of its national law reform commission. The modifications depart from the original DBR by imposing new, specific designs and distribution obligations on both securities issuers and their distributors aimed at protecting retail investors. This Article critically examines the usefulness of the DBR for individual unsophisticated investors and finds that those financial consumers are generally unable to understand corporate fundraising disclosures owing to various reasons, including a lack of adequate investment knowledge, defects in disclosures, and cognitive and behavioral biases. Drawing on its findings, this Article submits a set of recommendations with justifications embracing the recent reforms made in Australia, a developed economy, and solicits widening the scope of the proposed reforms crossing the boundary of newly introduced Australian paternalistic regulation (especially for developing and least developed countries). The central recommendation is to introduce a hybrid policy of disclosure and merit regulation to invigorate investor protection.