Malaysian Securities Commission
Plain Language Guide for Prospectuses, 2008

Flashcards

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Step 2: Click Next button again to show the explanation or
"After" Plain English revision; Repeat Steps 1 and 2.
Use Personal Pronouns.When you use personal pronouns, there is greater clarity in your message in addition to sounding more personal and friendly. This is because:

• Personal pronouns aid your reader’s comprehension, as they clarify what applies to your reader and what applies to you;

• They allow you to directly address your reader, creating an appealing tone that will keep your reader reading;

• They help you to avoid abstractions and to use common everyday words;

• They keep your sentences short; and

• First- and second-person pronouns are not gender-specific, allowing you to avoid the “he” or “she” pronouns. The pronouns to use are first-person plural (we, us, our/ours) and second-person singular (you, your/yours).
Original:

The following prospectus summary is only a summary of the salient information about the company and the public issue. Investors should read and understand the entire prospectus prior to deciding whether to invest in the public issue shares. The following information is qualified in its entirety and should be read in conjunction with the more detailed information and financial statements appearing elsewhere in this prospectus.
Plain English:

This is a summary of the salient information in the prospectus. It does not contain all the information that may be important to you. You should read and understand the entire prospectus carefully before you decide to invest in this public issue of shares.
Draft Clear and Concise Sentences

Original:

No person is authorised to give any information or to make any representation not contained herein in connection with the Issue/Offer and if given or made, such information or representation must not be relied upon as having been authorised by the Company and/or the Offerors. Neither the delivery of this prospectus nor any Issue/Offer in connection with this prospectus shall, under any circumstances, constitute a representation or create any implication that there has been no change in the affairs of the Company since the date hereof.



Plain English:

We have not authorised any person to give any information or represent us in relation to this Issue/Offer. Bear in mind also that this prospectus shall not represent or imply that there have been no change in the Company’s affairs since the issuance of this prospectus.
Use Common Everyday Words”Foray”, “peripherals”, “paraphernalia”, “excitation”, “sequential”, “miniaturisation” … when you read these words, can you understand them immediately? Do you try to form a picture of what they mean but at the end, they remain vague? Most people may have no idea what these words mean. Furthermore, such uncommon words may have different meanings for different people.

As such, use common everyday words in your examples so that your reader is not perplexed but can better digest the complex information important for making investment decisions.

Replace unnecessary complex words with simpler ones, for example–

• “end” instead of “terminate”;

• “explain” rather than “elucidate”; and

• “use” instead of “utilise”.
Avoid Superfluous WordsThere is a tendency to use superfluous words. Such words may lend an air of importance, but in fact, are less precise. You can often find a simpler word to use, for example:
Superfluous:

in the event that
Simple:

if
Superfluous:

Despite the fact that
Simple:

Although
Superfluous:

In light of
Simple:

Because, since
Avoid Superfluous WordsSometimes, superfluous words are used when one is unsure of a more concise alternative word. The tendency is to let loose several words, hoping at least one of them conveys the intended meaning. This may work sometimes, but more often it only confuses the reader. Therefore, identify and use a single word or phrase to capture an intended meaning.
Original:

The following summary information is only a summary of the salient information about ABC Berhad.
Plain English:

This summary highlights some salient information about us.
Use Active VoiceReaders tend to understand sentences that are written in the active voice more quickly and easily as compared to those written in the passive voice. The passive voice often fails to emphasise who will take the action.
Original (passive voice):

The application for the public issue will close at the time and date as stated above or such other date or dates as the Directors of the Company and the Managing Director may in their absolute discretion mutually decide.
Plain English:

Our Managing Director and Directors may mutually decide, at their absolute discretion, to extend the closing time and date that are stated above to any later date or dates.
Change Nouns to VerbsSubstituting nouns with strong verbs can enhance sentences.
Original (using noun "application"):

An application will be made to Bursa Securities within 3 market days.
Plain English (noun "application" turned into a verb):

We will apply to Bursa Securities within 3 market days.
Original (using noun "decision"):

The Court’s decision will be obtained on 29 February 2004.
Plain English (noun "decision" turned into a verb):

The Court will decide on 29 February 2004.
Use Less Legal and Financial Jargon“Notwithstanding”, “ab initio”, “inure”, “res gestae”, “herein” … such jargon confuses readers. Instead, use common words to get your points across. Where there is no plain English alternative, explain what the term means when you first use it.

If you have been in the financial or legal industry for some time, you may not realise that you are using legal or financial jargon, and it may take time to change. Of course, it is quite impossible to eliminate all legal and financial terms in drafting an offer document. In instances where there is no plain English alternative, consider explaining the term to aid investors’ comprehension. Elaboration of technical terms would also help to enhance investor education.
Original:

The Managing Underwriter and Underwriters as defined and referred thereto in Section 1 of this Prospectus have thereby agreed to undertake to underwrite the 7,000,000 Public Issue Shares to be issued to the following parties, namely the Malaysian Public, the Directors, eligible employees and business associates of ABC Berhad, as well as the 18,000,000 Offer Shares to be offered to the Malaysian Public and Identified Placees. Save and as otherwise provided hereafter in this Prospectus, all capitalised terms shall bear the same meanings as prescribed in the Underwriting Agreement referred thereto.
Plain English:

The Managing Underwriter and Underwriters have agreed to underwrite the 7,000,000 Public Issue Shares to be issued to the Malaysian Public, the Directors, eligible employees and business associates of ABC Berhad, as well as the 18,000,000 Offer Shares to be offered to the Malaysian Public and Identified Placees. Unless otherwise stated, all capitalised terms have the same meanings as defined in the Underwriting Agreement.
Use Positive Sentences and Not Multiple NegativesPositive sentences are normally shorter and easier to understand, as compared to their negative counterparts.
Original (negative sentence):

Persons other than preference shareholders may not receive these dividends.
Plain English (positive sentence):

Only preference shareholders may receive these dividends.
Use Positive Sentences and Not Multiple NegativesYou should also try to avoid multiple negative phrases, especially when a single word that means the same thing can be used.
Original (with multiple negative "not unlike")

Our services are not unlike that of multinational corporations providing the same services.
Plain English ("not unlike" turned into "similar"):

Our services are similar to those of multinational corporations providing the same type of services.
Use an Effective LayoutUse tables, bulleted lists, diagrams and graphs to reduce text and increase clarity.

Tables are often clearer and quicker in conveying information than long text.
Original:

The criteria of allocation for eligible employees is based on the job position of the employee, his length of service with the Company, whether he is a union member and that he has attained the age of 18 years.
Plain English (using bulleted list):

The criteria for allocation for eligible employees is:

• job position;

• length of service;

• whether a union member; and

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