European Journal of Law Reform

Article

Shifting from Financial Jargon to Plain Language

Advantages and Problems in the European Retail Financial Market

Keywords financial markets, financial information, PRIPs/KIIDs, financial jargon, plain language
Authors Francesco De Pascalis
Author's information

231193 Francesco De Pascalis
The author obtained an LLM degree in Banking and Finance Law at Queen Mary University of London in October 2010 and is admitted as a barrister to the Verona Bar Society. Currently, he is doctoral candidate at the Institute of Advanced Legal Studies, University of London.
  • Abstract

      The purpose of this paper is to discuss the European regulatory efforts to guarantee investors a proper understanding of the characteristics of the products being offered in the retail financial market. In particular, the analysis emphasises the proposal to introduce plain language as a mandatory requirement for drafting pre-contractual documents relating to retail financial products.
      The 2007-2009 financial crisis brought to attention the importance of providing investors with more information on financial products to help them make informed investment decisions. However, more disclosure alone is not enough. The quantity and quality of information to be disclosed must go hand in hand with the way the information is communicated.
      Plain language is seen as an adequate tool to make information more transparent and understandable to the average investor. However, to make plain language a valuable instrument, it is necessary to enhance the ability of those who have the responsibility to apply it, that is, the financial products’ issuers and distributors.
      This aspect deserves proper consideration; otherwise, the benefit of plain language will remain on paper.

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