The shorter PDS regime commenced in June 2012, but ASIC has conducted a review of a sample PDSs issued by superannuation funds and simple managed investment schemes.
Information Sheet 155 Shorter PDSs: Complying with requirements for superannuation products and simple managed investment schemes offers product providers clarity around employer-sponsored members and employer PDSs, whether and how investment options may change, and treatment of accumulation and pension interests in the one superannuation fund.
The ASIC review also found that some shorter PDSs were too long, according to the information sheet.
“The primary document must only be a maximum of eight A4 pages … it could be eight single-sided pages, or four double-sided pages,” said ASIC.
“We also found that some shorter PDSs were difficult to read because they used a small font size. You may be tempted to use a smaller font in shorter PDSs because of limited space,” said the information sheet.
A font size of at least nine points must be used by product providers, said ASIC – and when it comes to warnings, PDSs must attract attention to them by “amending the formatting of the required words to create emphasis”.
Shorter PDSs must also explain the cooling off period, and costs must be included in the document along with potential benefits, said ASIC.
ASIC commissioner Greg Tanzer noted that some product providers had responded “imaginatively” to the new regime looking to educate their customers.
“For example, about how superannuation works and the relationship between risk, return and investment time horizons. We are pleased to see initiatives that seek to improve consumer understanding,” said Mr Tanzer.
