ASIC questions disclosure rules

The Australian Securities and Investments Commission said yesterday that 44 per cent of consumers can't read well enough to understand investment disclosures and only 20 per cent use financial advisers. The information was presented at an investment industry conference by ASIC's deputy chairman, Jeremy Cooper, and generated much debate about the effectiveness of the current disclosure regime. The chief executive at Lateral Economics, Nicholas Gruen, said that while the rules sound like a good idea the reality was that advisers became buried in paperwork. Instead, Mr Gruen said that the market deals with complex information through the reputations of advisers or suppliers. The chief executive at MLC, Steve Tucker, said that while disclosure may have failed there needed to be some regulated safety net.

Source: The Australian Financial Review