The new Rudd Labor Government is determined to act in a timely and comprehensive manner to slash the lengthy, complex and unreadable disclosure documentation in financial services.
"Reform of financial services disclosure requirements is the first instalment in the Rudd Government's deregulation agenda. Cutting red tape will reduce costs for business, investors and consumers," Minister Tanner said.
"Complex and lengthy documents, often between 50 and 100 pages, are unreadable to most people. Unreadability of disclosure documents has been a factor in some investors' losses," said Minister Sherry.
The Minister for Superannuation and Corporate Law, Senator the Hon Nick Sherry and the Minister for Finance and Deregulation, the Hon Lindsay Tanner MP, today announced the formation of a Financial Services Working Group dedicated to looking at the current key issues associated with financial services advice and disclosure.
The Working Group will consist of senior officers from Treasury, ASIC and the Department of Finance and Deregulation.
The Working Group will carry out its work with industry and consumer groups and the Ministers encourage stakeholders to engage in this process.
"I have asked the Working Group to initially focus on solutions that would shorten financial product disclosure documents in superannuation and would improve Australians' access to cost effective financial advice," Minister Sherry said.
Product Disclosure Statements should be simple, readable, and as concise as possible on a product by product basis, focusing on fees, return and risk level.
The Working Group will commence its work immediately.
"Improving access to financial advice is of significant importance to both consumers and the economy. One of the key priorities for the Government in this context is to develop clear and understandable disclosure documents," Minister Sherry said.
Consumer 'road testing' to ensure readability will be applied to all new documents.
The Working Group's mandate is to determine the best possible approach to delivering short, comparable financial product disclosure documents and to determine an appropriate regulatory framework that facilitates the provision of financial advice in relation to the important decisions that investors make with regard to their superannuation.
The Working Group's tri-partite membership will ensure that solutions would achieve the Government's goals in relation to investors, be readily enforceable by the regulator and is in‑line with the Government's business deregulation agenda.
"I am committed to ensuring this project delivers significant benefits to the Australian people and I will be monitoring the Working Group's progress closely," Minister Sherry said.
Further product examination will be added to the work schedule throughout 2008.