Four-page PDS for margin loans

Product disclosure statements for financial products may be reduced to a more manageable length of only a few pages before long, with the Australian government proposing in the first instance a short form PDS for margin loans. Treasury published the suggestion version at its website yesterday though many lenders will have already seen versions.

With margin loans and other forms of lending coming under greater Commonwealth control, some aspects of earlier regulatory rounds are getting a rethink.

The Financial Services Reform laws of the late 1990s produced the current form of PDSs and Financial Services Guides, which, in the internet era, are readily accessible at the websites of banks, insurers and fund managers.

Each PDS, though, tends to be packed with every conceivable relevant disclosure.

The new view is that a short form disclosure document would be better. The Treasury version of four pages including cover page artwork, makes some basic observations about the product, risks and fees and invites readers to find more details at a supplier website.

How readily and soon this might spread to all financial products Treasury is yet to say.