Short-form PDS: got your docs in a row?

One of the less appreciated areas of change in our industry is the transition to shorter PDSs. The new regime becomes compulsory for in-scope products from 22 June this year, taking the secateurs to the product disclosure statement (PDS) thicket, slashing them to just 8 pages.

While the aims are laudable, the reality is that PDS production has never been a particularly exciting aspect of product management (well for most of us). And with a raft of strategic issues to focus on at present, it can be an unwelcome distraction as well as consuming limited product resources that could be better utilised elsewhere.

The new regime is designed to make PDSs shorter, simpler and more engaging for investors, with the expectation that they will enable more meaningful comparisons between products and, ultimately, better investment decisions. For PDS issuers, the more prescriptive requirements are designed to alleviate the uncertainty over how to interpret the ‘looser’ requirements and higher level ASIC guidance that applies for ‘traditional’ PDSs.

That’s the theory, anyway.

We appreciate that many of our clients are on top of the short-form PDS issue. For those still grappling with it, the new regulations prescribe both the form and content of the PDS – the PDS cannot exceed eight A4 pages, and must contain a summary of the “significant” information the government has determined investors need to know to help them make an investment decision eg information about the issuer, benefits, risks, costs, investment strategy and return objective (if this all sounds familiar, those with long memories will recall the Key Features Statement). Additional information can be incorporated by reference and that information is also prescribed.

From our review of short-form PDSs issued so far, they appear to be meeting at least some of these objectives – they are certainly shorter, easier to read and more uniform. Whether they lead to better decisions is yet to be seen of course. Our concern is that with the increased standardisation and generic information, investors may find it difficult to differentiate between products other than on the basis of brand and fees / costs – assuming they now actually read the PDS of course.

So what’s in-scope?

– “Simple” managed investment schemes
– Super products (other than DB schemes)
– First Home Saver Accounts
– Standard margin lending facilities

Out of scope? “Complex products” – which RE’s will have to determine (their external lawyers must be looking forward to billing for all these determinations).

The June deadline is fast approaching, so if you are yet to implement, you need to start this project as a matter of urgency.

In the event that you are running short on resources to meet the June 22 deadline, Tria has a well established process to get your short-forms to market quickly and cost effectively. So if you are at risk of missing the deadline, please get in touch with us – as soon as possible!