The irony of the SEC defining “plain English” is not lost on me. Read any regulation (our annual guidebooks are great for that) and you’ll understand. That said, regulations are complex for the protection of both issuer and investor. It’s not the most transparent version of English, however.
Here is how plain English is defined for proxy materials per Rule 421(d) under the Securities Act Presentation of Information in Prospectuses
- To enhance the readability of the prospectus, you must use plain English principles in the organization, language, and design of the front and back cover pages, the summary, and the risk factors section.
- You must draft the language in these sections so that at a minimum it substantially complies with each of the following plain English writing principles:
- Short sentences
- Definite, concrete, everyday words
- Active voice
- Tabular presentation or bullet lists for complex material, whenever possible
- No legal jargon or highly technical business terms
- No multiple negatives.
- In designing these sections or other sections of the prospectus, you may include pictures, logos, charts, graphs, or other design elements so long as the design is not misleading and the required information is clear.
- You are encouraged to use tables, schedules, charts and graphic illustrations of the results of operations, balance sheet, or other financial data that present the data in an understandable manner. Any presentation must be consistent with the financial statements and non-financial information in the prospectus.
- You must draw the graphs and charts to scale. Any information you provide must not be misleading.
If you’re designing your proxy materials and have any visual questions, ask your Vintage representative to see past samples of our work. If you have vocabulary questions – ask your securities lawyer.