The SEC Gives Hedge Funds "Plain English" Rulebook On Writing

The SEC recently handed hedge funds a rule book on how to write their marketing materials in simple English.

It’s called the “Plain English Handbook” and it has some great tips on how to simplify and improve your financial writing like: “write short sentences.”

They’re all great tips. And we’ve culled our favourites.

Omit superfluous words

Changes to make:

in order to --> to
in the event that --> if
subsequent to --> after
prior to --> before
despite the fact that --> although
because of the fact that --> because, since

Eliminate complex words

Ruthlessly eliminate jargon and legalese. Instead, use short, common words to get your points across.

Choose the simpler synonym

Surround complex ideas with short, common words.

Changes to make:

terminate --> end

elucidate --> explain

utilise --> use

Keep your sentence structure parallel

Use bullet points wherever possible

Listing information makes informa­tion easier to absorb in one quick glance.


We invest the fund's assets in:
• stocks of U.S. and foreign companies that
-- show improved earnings, and
-- sell at low prices relative to their cash flows or growth rates;
• debt, both investment grade and junk bonds; and
• U.S. Treasuries.

Translate complicated financial jargon

Provide capital appreciation --> increase the value of your shares

Provide dividends --> provide income

For example, change:

The Fund believes these stocks are undervalued and therefore represent basic investment value.


...these are undervalued stocks, meaning those selling for low prices given the financial strength of the companies.

Use charts, graphs, and tables, but not pie charts

'The only worse design than a pie chart is several of them.' -Tufte

Most readers find it difficult to draw accurate comparisons between pie slices or between multiple pie charts because the slices form irregular shapes. Showing the same information in a table can often be clearer.

Use short sentences

Draw graphics to scale

Don't trick your reader's eye using larger graphics on charts. Distorting proportions is confusing.

For example, if you are showing an increase in oil production through a series of oil barrels in ever-increasing sizes, make sure a barrel isn't represented as 50% bigger when production only went up 25% that year.

Try personal pronouns

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