Consultation opens on dual language disclosure documents

17 April 2018

Consultation opens on dual language disclosure documents

The FMA is seeking submissions on its proposal to enable companies offering investments to publish product disclosure statements (PDS) in both te reo Māori and English.

Under the current regulations, companies offering investments are effectively prevented from providing a PDS in more than one language due to prescribed length limits. For example, a PDS for an offer of managed investment products in a managed fund must not exceed 6,000 words or 12 pages of A4 paper when printed. These limits were imposed to address issues with disclosure documents prepared under the Securities Act.

An exemption would exempt issuers from these length limits. To qualify for the exemption, the two languages would need to accurately and fully reflect each other. The length limit would remain in force for the English part of the PDS. A number of other conditions are put forward in the consultation paper to be considered.

The FMA’s consultation also extends to considering whether the exemption should cover a PDS provided in English and any other language.

Nick Kynoch, FMA General Counsel said, “Providing documents in both English and te reo Māori has the potential to improve engagement and therefore effective decision-making by investors who are more comfortable when engaging with content provided in te reo Māori.”

The consultation paper also sets out potential risks and ways these could be mitigated. For example, there could be a discrepancy between the two languages in the PDS. This could be mitigated by requiring certification that the two languages accurately and fully reflect each other.

Submissions close on Thursday 17th May. FMA staff are also happy to meet in person to discuss the proposed exemption.

A copy of the consultation paper can be found here.

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