Disclosure documents “unreadable:”Sherry

Nick Sherry is scathing in his assessment of the way the way financial products are presently explained to potential investors.

“Disclosure documentation is lengthy, complex and unreadable to the average investor and consumer,” the Federal minster for Superannuation and Corporate Law said yesterday.
“It may as well be in Latin for its readability,” he added.

“Simple, short and standard disclosure is vital to inform decision-making and greater competition,” Senator Sherry declared.

Many investors, who have seen shares they thought they owned seized by at least one major bank, as loan security, would heartily endorse those sentiments.

Senator Sherry was addressing a conference entitled “Accounting Shenanigans, Executive Pay, Class Actions and Takeovers” that the Riskmetrics Group staged in Melbourne.

He acknowledged the present volatility in financial markets, but said the government is “well aware of the need for caution” before introducing new regulation.

Sherry  said financial market reforms must be “comprehensive, effective and – above all – sustainable.”

He said the government must not act in haste.

“While the Government needs to be responsive, it is important that we do not have a knee-jerk reaction to the current market turmoil,” Sherry said.

“This is why I believe in taking the longer-term view.

“And this is why I am committed to ensuring that we develop a comprehensive, effective, and resilient corporate governance framework that will stand us in good stead in the future.”

But he gave reckless directors a blunt warning.

Sherry said the government would be looking a imposing “personal liability” on directors in cases of “corporate fault.”

However he added that the government would not be attempting to set directors’ pay levels.