The Securities and Exchange Commission has pledged to write more clearly beginning this fall.
The Securities and Exchange Commission has pledged to write more clearly beginning this fall.
The agency published its plan Monday for meeting the requirements of the Plain Writing Act of 2010, which requires all federal agencies to use clear and concise language when preparing new or substantially revised documents. By Oct. 13, the SEC must use Federal Plain Language Guidelines and dejargonize documents that explain how to follow government rules or receive a benefit or service.
The law approved last year doesn’t apply to regulations, but narrative text that the commission issues with its proposed or adopted rules will follow the plain-English rules, the SEC said. Other SEC documents that will use an easy-to-understand written style include: no-action letters, exemptive and interpretive orders, SRO rule-filing notices and orders, compliance and investor alerts, comment letters, answers to frequently asked questions, press releases, published speeches and correspondence.
“One would think ‘plain English’ is easy to do,” said Lori Schock, the agency’s director of investor education and the official tasked with leading the plain-English effort. “People get caught up in the jargon and legalese that we use every day, but the end-user does not.”
The SEC will focus on writing without ambiguity, using short sentences, active voice, avoiding repetition and making sure to define any terms used, Ms. Schock said. Though she is in charge of the effort, each SEC office or division will have a plain-writing liaison.
Last year’s act is part of a continuing push by the federal government to cut back on the use of legalese in documents going to consumers. Directives pushing the government to use plain language have been signed by Presidents Jimmy Carter, Bill Clinton and Barack Obama, although Ronald Reagan rescinded his predecessor's efforts.
A year ago, the SEC approved new requirements for financial advisers to include plain-English descriptions of their investment philosophies, fees and possible conflicts of interest when they file ADV Part 2 forms. The commission sought to make it easier for clients to compare advisers’ services and business models. All financial advisory firms whose fiscal year ends Dec. 31 were required to file their ADV Part 2A documents using clear language writing by March 31, 2011.
“Plain English is something the SEC has been in the forefront of,” Ms. Schock said.
According to the SEC plain-English plan, about 125 employees will attend training sessions, and online seminars also will be available.
Agency-wide notice of which documents will have to be written in plain English went out to the staff yesterday. By next April 13, the SEC must submit the first of annual reports on how well it is writing plainly.
