SEC VOTES TO REQUIRE PLAIN WORDS.Byline: Bloomberg Bloomberg A major global provider of 24-hour financial news and information including real-time and historic price data, financials data, trading news and analyst coverage, as well as general news and sports. News The Securities and Exchange Commission approved a rule Thursday that requires companies to replace legal jargon jargon, pejorative term applied to speech or writing that is considered meaningless, unintelligible, or ugly. In one sense the term is applied to the special language of a profession, which may be unnecessarily complicated, e.g., "medical jargon. with plain English Plain English (sometimes known, more broadly, as plain language) is a communication style that focuses on considering the audience's needs when writing. It recommends avoiding unnecessary words and avoiding jargon, technical terms, and long and ambiguous sentences. in mutual fund, stock and bond prospectuses. ``We need investors to understand these documents that are so critical and are those that aren't being read now,'' said SEC Chairman Arthur Levitt. The commission unanimously approved the proposal. The new SEC style encourages use of shorter sentences, everyday language, a direct tone, an active voice and tables. Commission staff will review draft prospectuses filed by companies and funds and return those that lack clarity. Securities-industry studies have shown that most investors don't read the prospectuses. The SEC rule is to go into effect starting Oct. 1 for documents on securities offerings, mergers, acquisitions and limited partnerships. It will take effect for mutual fund prospectuses six months after the commission approves a separate proposal that would simplify these documents further with summaries, charts and tables. The SEC is expected to vote on the proposal, which would introduce a shortened short·en v. short·ened, short·en·ing, short·ens v.tr. 1. To make short or shorter. 2. ``profile'' prospectus to supplement the longer document, in the next few weeks. The commission said it will release a plain English handbook
This article is about reference works. For the subnotebook computer, see .
Brian Lane is a character in BBC TV's detective show New Tricks. He is played by Alun Armstrong. said. The SEC estimates companies will have to spend about $56 million in one-time expenses to translate their documents into plain English. The Securities Industry Association opposed the plain English proposal, saying company use of straightforward prose should be voluntary rather than mandatory. |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion