Tamsin Constable

Singapore financial institutions urged to end bad writing

Write your finance prospectuses in plain English! That’s the message to finance institutions from the Monetary Authority of Singapore. The regulators are fed up of seeing wordy jargon littering investor finance publications.

A consultation document released today found that much of the information about financial products that goes in prospectuses is so technical, vague and convoluted that it is difficult to understand. This prevents potential investors from making informed decisions. Common problems they identified include:

a) long, wordy and repetitive disclosures;

b) unnecessary, irrelevant or immaterial details;

c) material information concealed by the use of legal, financial or technical business jargons;

d) vague boilerplate disclosures which may not be meaningful to investors;

e) convoluted descriptions or explanations;

f) terms and conditions of contracts or agreements which are lengthy and difficult to understand, or reproduced in their entirety.

Clear writing, the Monetary Authority of Singapore states, is critical.

“The use of plain English is the setting out of information in a clear, concise and effective manner so that investors would be able to understand the information at their first reading. Using plain, everyday English makes prospectuses easier to understand and encourages investors to read prospectuses. You should always draft prospectuses with retail investors in mind as they are the audience with the greatest need for the information required to be disclosed in a prospectus. Prospectuses drafted in plain English are likely to help all investors to make informed investment decisions.”

You can read the full consultation paper here.