30 May 2012

Share offer language may be simplified

7:08 am on 30 May 2012

Steps taken in the Budget to standardise the way Kiwisaver funds report investor returns auger well for proposed changes to share offer documents, says a member of the Government's savings working group.

A Financial Markets Conduct Bill before Parliament will replace company prospectuses and investment statements with a new document for prospective investors, a product disclosure statement.

Working group member Paul Mersi has been concerned companies might have to continue producing documents in the existing format, which can run into hundreds of pages full of jargon.

But Mr Mersi says that agreement has been reached in the funds management industry for the new Kiwisaver reporting rules, and he is encouraged there may be a simpler format for corporate disclosures.

Meanwhile, Budget documents estimate the one-off cost for Kiwisaver managers of preparing for the new reporting requirements could be as much as 100-thousand dollars each.

Under the changes, managers must disclose returns, investments and fees using standard reporting formats 10 days after the end of each quarter, and 90 days after the end of each tax year.