Wednesday was a big day for the Securities Commission publicity department with five press releases http://www.seccom.govt.nz/ to churn out, detailing, amongst other things, government "moves on finance company moratoria" and rules that "will improve the quality of trustees' supervision".
They all looked really interesting but I
chose to only read the one http://www.seccom.govt.nz/new/commerce-minister/2009/2608093.shtml where Simon Power, Commerce Minister, mouthed off about the "latest developments and legislative objectives", which appeared to be the source from which the other four press releases were fashioned.
The speech didn't appear to be overly long, which I take as a positive sign, and included the obligatory motherhood statements ("We need well-informed investors who can invest their money with confidence, and businesses that can access capital so they can grow") as well as the small picture stuff.
For instance, Power expressed an intention to revitalise investment statements, which he said were now often too long "and so generic that they are meaningless - even if you can get people to read them".
He introduced the concept of the wealth warning - stolen from the Dutch - which would give investors a one-page snapshot of the crucial investment product info such as risks, returns (potential returns I suppose he means) and fees.
This is good news. It seems Power has really developed an affinity for how the investment industry really works - although I was a bit worried when he only admitted to having been "advised some [investment statements] are 40 pages long".
You'd think he'd might have at least skimmed through a real investment statement himself - but I guess if you can get someone else to do it for you...
But in his passion to simplify the investment statement Power has gone a bit too far with his next bit of thought-leadership.
"I'm also particularly interested in the question someone asked: what would disclosure documents look like if a graphic designer produced them instead of lawyers? Believe it or not, that question was posed by a lawyer!," he said in his speech.
In my experience, an investment statement produced by a graphic designer would include a lot of 'white space' and a high-concept image with the words, if they were to appear at all, distorted and impossible to read.
Maybe that's not too far away from what they are now.
David Chaplin
Pictured: Simon Power. Photo / Mark Mitchell
