A Plain English 

Handbook 

How to create clear 

SEC disclosure documents 

By the Office of Investor Education and Assistance 

U.S. Securities and Exchange Commission 

450 5th Street, N.W. 

Washington, DC 20549 

August 1998 
This handbook shows how you can use well-established techniques 

for writing in plain English to create clearer and more informative 

disclosure documents. We are publishing this handbook only for 

your general information. Of course, when drafting a document for 

filing with the SEC, you must make sure it meets all legal requirements. 
Acknowledgments 

This handbook reflects the work, ideas, and generosity of many 

individuals and organizations at the SEC and in the private sector. 

At the SEC, staff in the Divisions of Corporation Finance and 

Investment Management, the Offices of Public Affairs and General 

Counsel, and the Chairman’s Office provided insightful comments. 

In particular, Commissioner Isaac C. Hunt Jr., Nick Balamaci, Barry 

Barbash, Gregg Corso, Brian Lane, Diane Sanger, Jennifer Scardino, 

Michael Schlein, Heidi Stam, and Tony Vertuno offered invaluable 

advice and guidance. 

Corporate officials and lawyers enthusiastically helped us to breathe 

life into our plain English initiatives and this handbook. The Society 

of Corporate Secretaries, the American Bar Association, and The Bond 

Market Association invited us to conduct workshops where we tested 

much of the information in the handbook. Kathleen Gibson, Peggy 

Foran, Susan Wolf, Bruce Bennett, Jim McKenzie, Jeff Klauder, 

Fred Green, Mark Howard, Pierre de Saint Phalle, Richard M. Phillips, 

and Alan J. Davis contributed mightily to our efforts. 

Special thanks to Warren Buffett for his support and preface, to Ken 

Morris of Lightbulb Press, and to the talented staff at Siegel & Gale. I 

am especially grateful to the staff of my office for giving me the time 

and support I needed to work on the handbook. 

Nancy M. Smith 

Director, Office of Investor 

Education and Assistance 

a plain english handbook 
Three people poured their hearts and minds into this handbook from 

the start: Ann Wallace, from the Division of Corporation Finance; 

Carolyn Miller, formerly of Siegel & Gale and now with the SEC; and 

William Lutz, author and Professor of English at Rutgers University. 

All of the credit and none of the blame goes to them. 

And finally, many thanks to Chairman Arthur Levitt, who made it 

all possible by putting plain English at the top of his agenda so that 

investors might better understand their investments. • 

a plain english handbook 
Table of Contents
 

Preface by Warren E. Buffett 1
 

Introduction by Arthur Levitt, Chairman 3
 

U.S. Securities and Exchange Commission 

Chapter 1 What Is a “Plain English” Document? 5
 

Chapter 2 Getting Started 7
 

Chapter 3 Knowing Your Audience 9
 

Chapter 4 Knowing the Information You Need to Disclose 11
 

Chapter 5 Reorganizing the Document 15
 

Chapter 6 Writing in Plain English 17
 

Chapter 7 Designing the Document 37
 

Chapter 8 Time-Saving Tips 55
 

Chapter 9 Using Readability Formulas and Style Checkers 57
 

Chapter 10 Evaluating the Document 59
 

Chapter 11 Reading List 61
 

Chapter 12 Keeping in Touch with Us 63
 

Appendix A Plain English at a Glance 65
 

The SEC’s Plain English Rules—an Excerpt 66
 

Appendix B Plain English Examples 69
 

“Before” and “After” Filings with Notes 70
 

a plain english handbook 
a plain english handbook 
Preface 

This handbook, and Chairman Levitt’s whole drive to encourage “plain 

English” in disclosure documents, are good news for me. For more than 

forty years, I’ve studied the documents that public companies file. Too 

often, I’ve been unable to decipher just what is being said or, worse yet, 

had to conclude that nothing was being said. If corporate lawyers and 

their clients follow the advice in this handbook, my life is going to 

become much easier. 

There are several possible explanations as to why I and others sometimes stumble over an accounting note or indenture description. Maybe 

we simply don’t have the technical knowledge to grasp what the writer 

wishes to convey. Or perhaps the writer doesn’t understand what he or 

she is talking about. In some cases, moreover, I suspect that a less-thanscrupulous issuer doesn’t want us to understand a subject it feels legally 

obligated to touch upon. 

Perhaps the most common problem, however, is that a well-intentioned 

and informed writer simply fails to get the message across to an 

intelligent, interested reader. In that case, stilted jargon and complex 

constructions are usually the villains. 

This handbook tells you how to free yourself of those impediments to 

effective communication. Write as this handbook instructs you and you 

will be amazed at how much smarter your readers will think you have 

become. 

by Warren E. Buffett 

a plain english handbook 1 
One unoriginal but useful tip: Write with a specific person in mind. 

When writing Berkshire Hathaway’s annual report, I pretend that I’m 

talking to my sisters. I have no trouble picturing them: Though highly 

intelligent, they are not experts in accounting or finance. They will 

understand plain English, but jargon may puzzle them. My goal is 

simply to give them the information I would wish them to supply me 

if our positions were reversed. To succeed, I don’t need to be 

Shakespeare; I must, though, have a sincere desire to inform. 

No siblings to write to? Borrow mine: Just begin with “Dear Doris 

and Bertie.” • 

2 a plain english handbook 
Introduction 

Investors need to read and understand disclosure documents to 

benefit fully from the protections offered by our federal securities 

laws. Because many investors are neither lawyers, accountants, nor 

investment bankers, we need to start writing disclosure documents 

in a language investors can understand: plain English. 

The shift to plain English requires a new style of thinking and writing, 

whether you work at a company, a law firm, or the U.S. Securities and 

Exchange Commission. We must question whether the documents we 

are used to writing highlight the important information investors need 

to make informed decisions. The legalese and jargon of the past must 

give way to everyday words that communicate complex information 

clearly. 

The good news is that more and more companies and lawyers are 

using plain English and filing documents with the SEC that others 

can study, use, and improve upon. With the SEC’s plain English rules 

in place, every prospectus will have its cover page, summary, and risk 

factors in plain English. 

The benefits of plain English abound. Investors will be more likely to 

understand what they are buying and to make informed judgments 

about whether they should hold or sell their investments. Brokers and 

investment advisers can make better recommendations to their clients 

if they can read and understand these documents quickly and easily. 

by Arthur Levitt 

Chairman, U.S. Securities 

and Exchange Commission 

a plain english handbook 3 
Companies that communicate successfully with their investors form 

stronger relationships with them. These companies save the costs of 

explaining legalese and dealing with confused and sometimes angry 

investors. Lawyers reviewing plain English documents catch and correct 

mistakes more easily. Many companies have switched to plain English 

because it’s a good business decision. They see the value of communicating with their investors rather than sending them impenetrable 

documents. And as we depend more and more on the Internet and 

electronic delivery of documents, plain English versions will be easier 

to read electronically than legalese. 

The SEC’s staff has created this handbook to help speed and smooth 

the transition to plain English. It includes proven tips from those in 

the private sector who have already created plain English disclosure 

documents. This handbook reflects their substantial contributions and 

those of highly regarded experts in the field who were our consultants 

on this project, Dr. William Lutz at Rutgers University and the firm of 

Siegel & Gale in New York City. 

But I hasten to add that the SEC has not cornered the market on plain 

English advice. Our rules and communications need as strong a dose 

of plain English as any disclosure document. This handbook gives you 

some ideas on what has worked for others, but use whatever works 

for you. 

No matter what route you take to plain English, we want you to produce 

documents that fulfill the promise of our securities laws. I urge you 

—in long and short documents, in prospectuses and shareholder 

reports—to speak to investors in words they can understand. Tell 

them plainly what they need to know to make intelligent investment 

decisions. • 

4 a plain english handbook 
1 

What Is a “Plain 

English” Document? 

We’ll start by dispelling a common misconception about plain English 

writing. It does not mean deleting complex information to make the 

document easier to understand. For investors to make informed 

decisions, disclosure documents must impart complex information. 

Using plain English assures the orderly and clear presentation of 

complex information so that investors have the best possible chance 

of understanding it. 

Plain English means analyzing and deciding what information 

investors need to make informed decisions, before words, sentences, 

or paragraphs are considered. A plain English document uses words 

economically and at a level the audience can understand. Its sentence 

structure is tight. Its tone is welcoming and direct. Its design is visually 

appealing. A plain English document is easy to read and looks like it’s 

meant to be read. 

a plain english handbook 5 
This handbook’s purpose 

This handbook gives you practical tips on how to create plain English 

documents. All of these were born of experience. They come from 

experts and those who have already written or rewritten their documents in plain English. 

As with all the advice in this handbook, feel free to tailor these tips to 

your schedule, your document, and your budget. Not all of the tips will 

apply to everyone or to every document. Pick and choose the ones that 

make sense for you. 

Some of our tips cover very basic mechanical issues, like how to photocopy your working draft. We’ve included them because they were 

learned the hard way and have saved people time, money, and aggravation. You’ll see them listed in Chapter 8, titled “Time-Saving Tips.” 

This handbook is by no means the last word on plain English. We 

expect to change it and add more tips as we learn more about writing 

securities documents in plain English. So please keep notes on your 

experiences and copies of your original and rewritten language. We 

want to hear from you and include your tips and rewrites in the next 

edition. 

Finally, we encourage you to give this handbook out freely. It is not 

copyrighted, so you can photocopy it without fear of penalty. • 

6 a plain english handbook 
Getting Started 

Assemble the team or move ahead on your own 

As with a lot of things in life, it’s the preparation that often determines 

the success or failure of an effort to write documents in plain English. 

Many of you routinely select a team to think and talk about how to write 

a document from scratch or rewrite an existing document. Or you may 

do it on your own. In that case, rest assured that one person can do it 

alone. 

The list below describes the types of people who have participated in 

successful plain English teams. We’re not suggesting that you need to select 

everyone listed. Some will not apply to your company or your situation. 

The people you select, and the point at which you involve them in your 

plain English project, will depend on your document, your schedule, 

and your budget. 

• A team leader who has the authority to make decisions that keep 

the project moving forward and bring it to a successful conclusion. 

(More than one plain English project has faltered because the team 

leader has not had this level of authority.) The team leader may be 

a company’s or an underwriter’s lawyer. 

• A lead writer who ensures the document uses a logical structure and 

simple, clear language. If more than one person is drafting sections of 

the document, the lead writer makes sure the final draft has a consistent tone and the individual parts form a coherent whole. 

• Lawyers for the company or the underwriter who know what information must be included and why. 

a plain english handbook 7 

2
 
• An investor relations expert who knows firsthand the financial sophistication of your investors. Investor relations people know which questions investors typically ask and where past disclosure documents have 

failed to make information clear. 

• A compliance officer who can lend guidance to the writer and who 

knows, along with your lawyers, what information must be included. 

• A production and operations person who understands the mechanics 

and costs of printing and mailing your document, so that your 

improved document doesn’t get ahead of your in-house capabilities or 

budget. 

• A marketing person who may have market survey research or polls on 

your investors. Also, the marketing department is usually attuned to 

the terminology that your investors can readily understand. 

• An information designer who is a graphic designer trained to work 

closely with the writers and to think about how to present complex 

information visually. 

Select documents 

You may want to consider these issues as you start writing in plain 

English: 

• How long is the document? 

• Will you write all of it, or only sections of it, in plain English? 

• How much time do you have before you need to file your document? 

You will also want to gather and distribute other documents that your 

company has written for investors. It’s likely that your company has 

already used plain English in its glossy annual reports and other communications prepared especially for investors. These documents may 

save you time by showing you the type of language your company is 

already comfortable using. • 

8 a plain english handbook 
Knowing Your Audience
 

Knowing your audience is the most important step in assuring that 

your document is understandable to your current or prospective 

investors. To write understandable documents, you need to gauge the 

financial sophistication of your investors. 

Through polls and other market survey research tools, some companies 

know the demographics of their investors well. Other companies rely on 

their investor relations staff or their underwriters to describe who has 

bought, or is likely to buy, their securities. 

Using whatever information is available, you can create a profile 

of your investors or prospective investors based on the following 

questions: 

• What are their demographics—age, income, level of education, and 

job experience? 

• How familiar are they with investments and financial terminology? 

• What investment concepts can you safely assume they understand? 

• How will they read the document for the first time? Will they read it 

straight through or skip around to the sections that interest them? 

• Will they read your document and your competitors’ side by side? 

• How will they use the document while they own the security? 

What information will they be looking for later, and is it easy to find? 

a plain english handbook 9 

3
 
“One must consider also 

the audience...the reader 

is the judge.” 

Aristotle 

Rhetoric 

Your investors or prospective investors may include individuals and 

institutions with varying degrees of financial sophistication. While your 

audience will include analysts and other industry experts, you may want 

to keep in mind that your least sophisticated investors have the greatest 

need for a disclosure document they can understand. Some companies 

have faced the differing needs of their investors and other audiences 

by making basic educational information visually distinctive from the 

rest of the text so that sophisticated investors can easily recognize and 

scan it. 

Once you’ve drawn a profile of your investors, keep it constantly in 

mind. Some writers keep a photo of a typical investor to make sure they 

don’t lose sight of their readers. 

After analyzing who your investors are, you can turn to the document 

you want to write or rewrite. • 

10 a plain english handbook 
Knowing the 

Information You Need 

to Disclose 

The steps outlined in this section have been used successfully by 

others who have written disclosure documents in plain English. As we 

said earlier, feel free to tailor these steps to your own schedule and 

team. This is one approach if you are rewriting an existing document, 

but others may work equally well. 

Read and outline the current document 

Read the entire document once without making any notes or comments 

on the text. This should give you a general understanding of the 

information covered in the document and make your next read more 

productive. 

When you read it the second time, make notes on what information 

is covered and any questions you have. Your notes will also help you to 

assess if information flows through your document in a logical order. 

As you read, consider the following: 

• Will the investors understand the language? 

• Does the document highlight information that is important to 

investors? 

• Is any important information missing? 

• Does the document include information that is not legally required 

and will not help investors make informed decisions? 

4 

For time-saving tips on how to 

outline and reorganize your 

document, read Chapter 8 on 

page 55. 

a plain english handbook 11 
“Writers must therefore 

constantly ask: 

What am I trying to say? 

Surprisingly often they 

don’t know. They must 

look at what they have 

written and ask: 

Have I said it?” 

William Zinsser 

On Writing Well 

Meet to resolve questions 

Meet with the authors of the original document or others who understand it and any members of the team who can help to answer the 

questions you wrote in the margins. Besides the obvious reason for 

the meeting, another more important goal is 

to question the need for everything that appears in the document. 

“Because it’s always been there” is not reason enough to keep it in your 

draft. Since much of the language in these documents is recycled from 

older (or another company’s) documents, often no one knows who 

initially wrote it or why it is needed now. If you’ve done your legal 

research and no one knows why the information is important or 

required, consider taking it out. 

Eliminate redundant information 

Question the need for repeating any information. Reading the same 

material two or three times can bore and even trouble readers. Most 

readers skip over paragraphs if they think they’ve read them before. 

If you cut down on repetitious paragraphs or sentences, you’ll not only 

earn the gratitude of your reader, you’ll reduce printing and mailing 

costs. 

Discuss the cover page and the summary 

A cover page should be an introduction, an inviting entryway into your 

document, giving investors some key facts about your offering, but not 

telling everything all at once. If it looks dense and overgrown with 

thorny details, no one will want to pick it up and start reading. If it 

looks like a legal document written by lawyers and for lawyers, many 

investors will not even attempt to read it. 

To create an inviting cover page, you’ll need to strip away much of what 

is conventionally placed there, but which is not required. 

12 a plain english handbook 
As you review your cover page, question why each item of information 

is there. It may be important, but does it have to be on the cover page? 

You usually have a substantial document following the cover page—let 

some of those other pages carry the information load in logical order. 

What would be helpful for investors to see on this page? Look through 

your investors’ eyes and you’ll make better decisions about where to 

place information. 

The same goes for the summary. A summary should orient the reader, 

highlighting the most important points that are presented in greater 

detail in the prospectus. Many summaries now seem as long as the 

document itself and consist merely of paragraphs copied straight from 

the body of the document. 

Use defined terms sparingly 

Although customary, introducing defined terms on the cover page and 

in the summary discourages many readers from getting beyond the first 

pages. Overwhelmed with memorizing a new and unnatural vocabulary, 

and bothered by constantly having to flip back and hunt for the first 

time a defined term’s definition appears, many an investor will not stick 

with the document. One plain English expert has advised, don’t let a 

shortcut for the writer become a roadblock for the reader. • 

a plain english handbook 13 
14 a plain english handbook 
Reorganizing the 

Document 

A few principles of good organization apply universally. 

First, present the big picture before the details. Prospectuses routinely 

start with a detailed description of the securities. You may read pages 

before you find out what the company produces, or why it is merging or 

spinning off a subsidiary. It’s hard to absorb the details if you don’t 

know why they are being given to you. Imagine trying to put together a 

complicated jigsaw puzzle without first seeing the picture of the completed puzzle. An individual piece of information means more to your 

readers if they know how it fits into the big picture. 

Second, use descriptive headers and subheaders to break your 

document up into manageable sections. Prospectuses impart a lot of 

information. If you present the information in bite-sized pieces, it’s 

easier to digest. Make sure your headings tell the reader what the 

upcoming sections will cover. Headings like “general” or “background” 

aren’t especially helpful. 

Third, always group related information together. This helps you 

identify and eliminate repetitious information. 

a plain english handbook 15 

5
 
Fourth, your audience’s degree of investment expertise will affect how 

you organize the document. If you are writing for financially unsophisticated investors, your document’s overall organization may take an 

educational approach. You may need to explain industry terms or 

concepts where they first appear. 

Fifth, review your document by taking a good look at the flow of information from beginning to end. Start making decisions on how the content should be moved around into a new and logical order based on: 

• the audience profile 

• the notes you made in the margins 

• the decisions you’ve made on your cover page and summary 

• the information you’ve learned in answering your questions 

Once you have finished physically reorganizing the document, you may 

want to write an outline of your new organization. Your outline can 

later become your table of contents. 

You’re now ready to start rewriting your document in plain English. 

And, speaking of writing... • 

16 a plain english handbook 
6 

Writing in 

Plain English 

We thought it would be helpful to list the most common problems 

we’ve encountered with disclosure documents. 

Common problems 

• Long sentences 

• Passive voice 

• Weak verbs 

• Superfluous words 

• Legal and financial jargon 

• Numerous defined terms 

• Abstract words 

• Unnecessary details 

• Unreadable design and layout 

In the following pages we offer some ways to fix these problems. 

a plain english handbook 17 
We’ve listed just some of the 

many books on how to write 

clearly in Chapter 11. We urge 

you to consult them, too. 

“Straightforward 

sentences sound unimpressive to many writers, 

and officialese, creating 

tin ears, perpetuates 

itself.” 

Claire Kehrwald Cook 

Line by Line 

For example, here’s a common sentence found in prospectuses: 

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY 

INFORMATION OR MAKE ANY REPRESENTATION OTHER 

THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS JOINT PROXY STATEMENT/PROSPECTUS, 

AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN 

AUTHORIZED. 

Here’s one possible plain English rewrite: 

You should rely only on the information contained in this document 

or that we have referred you to. We have not authorized anyone to 

provide you with information that is different. 

The plain English rewrite uses everyday words, short sentences, active 

voice, regular print, and personal pronouns that speak directly to the 

reader. 

Do you think the rewrite captures the meaning of the original? Would 

you write it differently? 

Throughout this chapter, you’ll find “before” examples from disclosure 

documents with plain English “after” examples to illustrate specific 

principles of plain English. Since some of the “before” examples contain ambiguities that can be successfully resolved only by studying their 

context in a particular document, we did not attempt to provide rewrites 

to cover every interpretation. We encourage you to write your own plain 

English versions to fit your views and your needs. We don’t want to 

create a new generation of plain English “boilerplate.” 

Although the principles that follow may sound deceptively simple, if 

you use them, your writing will improve dramatically. 

18 a plain english handbook 
Use the active voice with strong verbs
 

The plodding verbosity of most disclosure documents makes readers 

yearn for clear words and short sentences. The quickest fix lies in using 

the active voice with strong verbs. Strong verbs are guaranteed to liven 

up and tighten any sentence, virtually causing information to spring 

from the page. When you start to rewrite or edit your work, highlighting 

all the verbs can help. You may be surprised by the number of weak 

verbs, especially forms of “to be” or “to have” that you’ll find. 

The time you spend searching for a precise and strong verb is time well 

spent. When a verb carries more meaning, you can dispense with many 

of the words used to bolster weak verbs. 

Weak verbs keep frequent company with two more grammatical 

undesirables: passive voice and hidden verbs. In tandem, they add 

unnecessary length and confusion to a sentence. 

The active and passive voices 

If you need it, here’s a quick refresher on the active and passive voice. 

active 

The investor buys the stock. 

In the active voice, the subject of the sentence, the investor, performs 

the action, buying the stock. 

passive 

The stock is bought by the investor. 

In the passive voice the subject, the stock, is acted upon. The person or 

the thing doing the action is introduced with “by.” But sometimes, the 

person or thing doing the action is deleted, leading to... 

passive with agent deleted 

The stock is bought. 

You don’t know who bought the stock. You’ll find many examples of the 

“passive with agent deleted” in disclosure documents. 

Readers understand sentences in the active voice more quickly and 

easily because it follows how we think and process information. Many 

times the passive voice forces readers to take extra mental steps as they 

convert the passive into the active. 

“A rambling, unwieldy sentence 

generally hangs from an 

inert...vague, actionless verb.” 

Claire Kehrwald Cook 

Line by Line 

a plain english handbook 19 
“When you make all the 

verbs active, other economies 

suggest themselves.” 

Claire Kehrwald Cook 

Line by Line 

To recognize the passive voice, ask yourself: 

Does the sentence use a form of the verb “to be” with: 

• another verb in the past tense; and 

• a prepositional phrase beginning with “by”? 

Remember that it’s harder to recognize the passive voice when the 

object (the phrase introduced with “by”) is left out. When you rewrite 

the sentence in the active voice, use a strong verb. These examples show 

how strong verbs and the active voice transform sentences, making 

them shorter and easier to understand. 

before 

The foregoing Fee Table is intended to assist investors in understanding the costs and expenses that a shareholder in the Fund will 

bear directly or indirectly. 

The before example uses the passive with agent deleted. We don’t know 

who “intended” to assist investors. Note how long it took to get to the 

meat of the sentence—the costs and expenses. Dispensing with the 

filler words “...to assist investors in understanding...” moves the reader 

more quickly to the important points. 

after 

This table describes the fees and expenses that you may pay if you 

buy and hold shares of the fund. 

Here’s another example: 

before 

The proxies solicited hereby for the Heartland Meeting may be 

revoked, subject to the procedures described herein, at any time 

up to and including the date of the Heartland Meeting. 

after 

You may revoke your proxy and reclaim your right to vote up to 

and including the day of the meeting by following the directions 

on page 10. 

The plain English version tells you who may revoke a proxy and where 

to find the information on how to do it. It replaces the abstract “subject 

to the procedures described herein” with concrete, everyday words, “by 

following the directions on page 10.” It’s not enough merely to translate 

existing texts—the key is to add useful information. 

20 a plain english handbook 
Don’t ban the passive voice, use it sparingly 

As with all the advice in this handbook, we are presenting guidelines, 

not hard and fast rules you must always follow. The passive voice may 

make sense when the person or thing performing the action is of 

secondary importance to another subject that should play the starring 

role in sentence. Use the passive voice only when you have a very good 

reason for doing so. When in doubt, choose the active voice. 

Find hidden verbs 

Does the sentence use any form of the verbs “to be,” “to have,” or 

another weak verb, with a noun that could be turned into a strong verb? 

In these sentences, the strong verb lies hidden in a nominalization, 

a noun derived from a verb that usually ends in -tion. Find the noun 

and try to make it the main verb of the sentence. As you change nouns 

to verbs, your writing becomes more vigorous and less abstract. 

before after 

We made an application... We applied... 

We made a determination... We determined... 

We will make a distribution... We will distribute... 

before 

We will provide appropriate information to shareholders 

concerning... 

after 

We will inform shareholders about... 

before 

We will have no stock ownership of the company. 

after 

We will not own the company’s stock. 

before 

There is the possibility of prior Board approval of these 

investments. 

after 

The Board might approve these investments in advance. 

a plain english handbook 21 
Try personal pronouns
 

“Thanks to the existence of 

pronouns, we are spared a 

soporific redundancy in 

literature, speech, and songs.” 

Karen Elizabeth Gordon 

The Transitive Vampire 

No matter how sophisticated your audience is, if you use personal pronouns the clarity of your writing will dramatically improve. Here’s why. 

First, personal pronouns aid your reader’s comprehension because they 

clarify what applies to your reader and what applies to you. 

Second, they allow you to “speak” directly to your reader, creating an 

appealing tone that will keep your reader reading. 

Third, they help you to avoid abstractions and to use more concrete and 

everyday language. 

Fourth, they keep your sentences short. 

Fifth, first- and second-person pronouns aren’t gender-specific, allowing 

you to avoid the “he or she” dilemma. The pronouns to use are firstperson plural (we, us, our/ours) and second-person singular (you, 

your/yours). 

Observe the difference between these two examples: 

before 

This Summary does not purport to be complete and is qualified 

in its entirety by the more detailed information contained in the 

Proxy Statement and the Appendices hereto, all of which should 

be carefully reviewed. 

after 

Because this is a summary, it does not contain all the information 

that may be important to you. You should read the entire proxy 

statement and its appendices carefully before you decide how 

to vote. 

22 a plain english handbook 
Bring abstractions down to earth 

Abstractions abound in the financial industry. What pictures form in 

your mind when you read these phrases: mutual fund, the Dow Jones 

Industrial Average, zero coupon bond, call option, or foreign currency 

trading? Most people don’t have an image in their minds when they 

hear abstract words like these. And yet, it’s far easier to comprehend 

a concept or a situation when your mind can form images. 

In a study conducted at Carnegie-Mellon University, a cognitive psychologist and an English professor discovered that readers faced with complex written information frequently resorted to creating “scenarios” in 

an effort to understand the text. That is, they often made an abstract 

concept understandable by using it in a hypothetical situation in which 

people performed actions. 

You can make complex information more understandable by giving 

your readers an example using one investor. This technique explains 

why “question and answer” formats often succeed when a narrative, 

abstract discussion fails. 

Here is an example of how this principle can be used to explain an 

abstract concept—call options: 

For example, you can buy an option from Mr. Smith that gives you 

the right to buy 100 shares of stock X from him at $25.00 per share 

anytime between now and six weeks from now. You believe stock 

X’s purchase price will go up between now and then. He believes it 

will stay the same or go down. If you exercise this option before it 

expires, Mr. Smith must sell you 100 shares of stock X at $25.00 

per share, even if the purchase price has gone up. Either way, 

whether you exercise your option or not, he keeps the money you 

paid him for the option. 

Although it is impossible to eliminate all abstractions from writing, 

always use a more concrete term when you can. 

“Use concrete terms and your 

readers will have a clearer idea 

of your meaning. You enhance 

your words when you allow 

readers to visualize what 

you say.” 

Bryan A. Garner 

The Elements of Legal Style 

a plain english handbook 23 
“Language that is more 

concrete and specific creates 

pictures in the mind of [your] 

listener, pictures that should 

come as close as possible to 

the pictures in your mind.” 

William Lutz 

The New Doublespeak: 

Why No One Knows What 

Anyone’s Saying Anymore 

Read this list of progressively less abstract terms and consider how you 

might make abstract concepts you write about more concrete: 

Asset ➡ Investment ➡ Security ➡ Equity ➡ Stock ➡ 

➡ Common stock ➡ One share of IBM common stock 

The following examples show how you can replace abstract terms with 

more concrete ones and increase your reader’s comprehension: 

before 

Sandyhill Basic Value Fund, Inc. (the “Fund”) seeks capital appreciation and, secondarily, income by investing in securities, primarily 

equities, that management of the Fund believes are undervalued 

and therefore represent basic investment value. 

after 

At the Sandyhill Basic Value Fund, we will strive to increase the 

value of your shares (capital appreciation) and, to a lesser extent, to 

provide income (dividends). We will invest primarily in undervalued 

stocks, meaning those selling for low prices given the financial 

strength of the companies. 

before 

No consideration or surrender of Beco Stock will be required of 

shareholders of Beco in return for the shares of Unis Common 

Stock issued pursuant to the Distribution. 

after 

You will not have to turn in your shares of Beco stock or pay 

any money to receive your shares of Unis common stock from 

the spin-off. 

24 a plain english handbook 
Omit superfluous words 

Words are superfluous when they can be replaced with fewer words that 

mean the same thing. Sometimes you can use a simpler word for these 

phrases: 

superfluous simpler 

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 

in light of because, since 

owing to the fact that because, since 

Another source of superfluous words is “shotgunning”: letting loose 

a blast of words hoping at least one conveys your intended meaning. 

The simplest solution here is to replace your laundry list of adjectives 

with a single word or phrase that adequately expresses your intended 

meaning. 

Omitting superfluous words is one of the easiest ways to improve your 

disclosure document because it doesn’t require you to revise sentence 

structure. 

before 

The following summary is intended only to highlight certain information contained elsewhere in this Prospectus. 

after 

This summary highlights some information from this Prospectus. 

before 

Machine Industries and Great Tools, Inc. are each subject to the 

information requirements of the Securities Exchange Act of 1934, 

as amended (the “Exchange Act”), and in accordance therewith 

file reports, proxy statements and other information with the 

Securities and Exchange Commission (the “Commission”). 

after 

We file annual, quarterly, and special reports, proxy statements, and 

other information with the Securities and Exchange Commission 

(SEC). 

“...the most valuable of all 

talent, that of never using 

two words where one will do.” 

Thomas Jefferson 

For an expanded explanation 

of “shotgunning,” see 

Richard Wydick’s Plain English 

for Lawyers. 

a plain english handbook 25 
“Vigorous writing is concise. 

A sentence should contain 

no unnecessary words...for 

the same reason that a drawing 

should have no unnecessary 

lines and a machine no 

unnecessary parts.” 

Strunk and White 

The Elements of Style 

before 

Drakecorp has filed with the Internal Revenue Service a tax ruling 

request concerning, among other things, the tax consequences of 

the Distribution to the United States holders of Drakecorp Stock. 

It is expected that the Distribution of Beco Common Stock to the 

shareholders of Drakecorp will be tax-free to such shareholders for 

federal income tax purposes, except to the extent that cash is 

received for fractional share interests. 

after 

While we expect that this transaction will be tax free for U.S. 

shareholders at the federal level (except for any cash paid for 

fractional shares), we have asked the Internal Revenue Service 

to rule that it is. 

26 a plain english handbook 
Write in the “positive”
 

Positive sentences are shorter and easier to understand than their 

negative counterparts. For example: 

before 

Persons other than the primary beneficiary may not receive 

these dividends. 

after 

Only the primary beneficiary may receive these dividends. 

Also, your sentences will be shorter and easier to understand if you 

replace a negative phrase with a single word that means the same thing. 

For example: 

negative compound single word 

not able unable 

not accept reject 

not certain uncertain 

not unlike similar, alike 

does not have lacks 

does not include excludes, omits 

not many few 

not often rarely 

not the same different 

not ... unless only if 

not ... except only if 

not ... until only when 

a plain english handbook 27 
“There’s not much to be said 

about the period except that 

most writers don’t reach it 

soon enough.” 

William Zinsser 

On Writing Well 

Use short sentences 

No one likes to read a sentence that’s two pages long. And yet, lengthy, 

information-packed sentences choke many prospectuses today. To 

complicate matters further, these sentences are filled with jargon and 

legalese. The longer and more complex a sentence, the harder it is for 

readers to understand any single portion of it. 

before 

The following description encompasses all the material terms 

and provisions of the Notes offered hereby and supplements, and 

to the extent inconsistent therewith replaces, the description of 

the general terms and provisions of the Debt Securities (as defined 

in the accompanying Prospectus) set forth under the heading 

“Description of Debt Securities” in the Prospectus, to which 

description reference is hereby made. The following description 

will apply to each Note unless otherwise specified in the applicable 

Pricing Supplement. 

If you really want to root out the problem with this paragraph, you need 

to think of the deeper reasons why it doesn’t work. If you look beyond 

the language used, you’ll find that it presents complex information 

without first providing a context for the reader. 

The rewrites that follow show two ways to provide the context, with 

and without tabulation. 

after 

We provide information to you about our notes in three separate 

documents that progressively provide more detail: 1) the prospectus, 

2) the prospectus supplement, and 3) the pricing supplement. Since 

the terms of specific notes may differ from the general information 

we have provided, in all cases rely on information in the pricing 

supplement over different information in the prospectus and the 

prospectus supplement; and rely on this prospectus supplement 

over different information in the prospectus. 

28 a plain english handbook 
or 

We provide information to you about our notes in three separate 

documents that progressively provide more detail: 

1 The Prospectus 

General information that may or may not apply to each note. 

2 The Prospectus Supplement 

More specific than the prospectus, and to the extent information differs from 

the prospectus, rely on the different information in this document. 

3 The Pricing Supplement 

Provides final details about a specific note including its price. To the extent 

information differs from the prospectus or the prospectus supplement, rely 

on the different information in this document. 

Information-packed sentences leave most investors scratching their 

heads. So many of these sentences have become “boilerplate” that 

writers cut and paste them into new documents without thinking about 

how they can be improved. Since these sentences can be a little intimidating, we thought we’d tackle another one: 

before 

The Drake Capital Corporation (the “Company”) may offer from 

time to time its Global Medium-Term Notes, Series A, Due from 

9 months to 60 Years From Date of Issue, which are issuable in 

one or more series (the “Notes”), in the United States in an aggregate principal amount of up to U.S. $6,428,598,500, or the equivalent thereof in other currencies, including composite currencies 

such as the European Currency Unit (the “ECU”) (provided that, 

with respect to Original Issue Discount Notes (as defined under 

“Description of Notes—Original Issue Discount Notes”), the initial 

offering price of such Notes shall be used in calculating the aggregate principal amount of Notes offered hereunder). 

after 

The Drake Capital Corporation may offer at various times up to 

U.S. $6,428,598,500 worth of Global Medium-term notes. These 

notes will mature from 9 months to 60 years after the date they are 

purchased. We will offer these notes in series, starting with Series 

A, and in U.S., foreign, and composite currencies, like the 

European Currency Unit. If we offer original issue discount notes, 

we will use their initial offering prices to calculate when we reach 

$6,428,598,500. 

“A subject may have so many 

qualifications that readers 

forget what it is before they 

find out what it does.” 

Claire Kehrwald Cook 

Line by Line 

a plain english handbook 29 
“Clearness is secured by 

using the words...that are 

current and ordinary.” 

Aristotle 

Rhetoric 

As you can see, one long sentence became four shorter sentences. The 

paragraph moves from the general to the specific, contains short, common words, and is written in the active voice. You only need to read the 

paragraph once to understand it. 

Replace jargon and legalese with short, common words 

Ruthlessly eliminate jargon and legalese. Instead, use short, common 

words to get your points across. In those instances where there is no 

plain English alternative, explain what the term means when you first 

use it. 

If you have been in the financial or legal industry for awhile, it may 

be hard to spot jargon and legalese in your writing. Consider asking 

someone outside the industry to check your work for incomprehensible 

words. 

Last, don’t create new jargon that’s unique to your document in the 

form of acronyms or other words. It’s asking too much of your readers 

to memorize a new vocabulary while they are trying to understand 

complicated concepts. This holds true for individual and institutional 

investors. Note the following, which is the first sentence on the cover 

page of an exchange offer: 

NLR Insured Mortgage Association, Inc., a Delaware corporation 

(“NLR MAE”), which is an actively managed, infinite life, New York 

Stock Exchange-listed real estate investment trust (“REIT”), and 

PAL Liquidating REIT, Inc., a newly formed, finite life, self-liquidating Delaware corporation which intends to qualify as a REIT (“PAL 

Liquidating REIT”), hereby jointly offer, upon the terms and subject 

to the conditions set forth herein and in the related Letters of 

Transmittal (collectively, the “Offer”), to exchange (i) shares of NLR 

MAE’s Common Stock, par value $.01 per share (“NLR MAE 

Shares”), or, at the option of Unitholders, shares of PAL Liquidating 

REIT’s Common Stock, par value $.01 per share (“PAL Liquidating 

REIT Shares”), and (ii) the right to receive cash payable 60 days 

after closing on the first of any Acquisitions (as defined below) but 

in no event later than 270 days (nine months) following consummation of the Offer (the “Deferred Cash Payment”), for all outstanding 

Limited Partnership Interests and Depository Units of Limited 

Partnership Interest (collectively, “Units”) in each of PAL Insured 

Mortgage Investors, a California limited partnership (“PAL 84”), 

PAL Insured Mortgage Investors - Series 85, A California Limited 

Partnership, a California limited partnership (“PAL 85”), and PAL 

Insured Mortgage Investors L.P. - Series 86, a Delaware limited 

partnership (“PAL 86”). See “THE OFFER.” 

30 a plain english handbook 
This sentence suffers from many shortcomings. It’s long and laden 

with defined terms and other data that mask the fundamental information: the two companies are offering to exchange their stock for the 

investors’ limited partnership holdings. Some of the information, such 

as par value and places of incorporation, can be moved to another part 

of the document. Much of the language modifies the subjects and the 

objects: this language, too, can be moved to a separate sentence or 

another section of the prospectus. 

This example shows the hazards of creating unfamiliar acronyms. They 

provide false economies, especially when they are introduced on the 

cover page and in the first pages of the prospectus. They may save 

a few words, but they may also frustrate and force the reader to take 

more time and effort to understand the document. Where acronyms, 

such as REIT, are widely understood to the investing public, they can 

safely be used without creating confusion. 

Occasionally, it’s necessary to assign a shorter word to a long proper 

noun and use this word throughout the rest of the document. In these 

rare instances, try to choose a word that has an intuitive, logical 

relationship to the one it’s replacing. This reduces the number of new 

words or phrases the reader needs to memorize to understand the 

document. 

Choose the simpler synonym 

Surround complex ideas with short, common words. For example, 

use end instead of terminate, explain rather than elucidate, and use 

instead of utilize. When a shorter, simpler synonym exists, use it. 

“Lawyerisms are words like 

aforementioned, whereas, res 

gestae, and hereinafter. They 

give writing a legal smell, but 

they carry little or no legal 

substance.” 

Richard C. Wydick 

Plain English for Lawyers 

a plain english handbook 31 
Modifiers are words or 

phrases that describe or limit 

the subject, verb, or object. 

Keep the subject, verb, and object close together 

Short, simple sentences enhance the effectiveness of short, common 

words. We’ve covered a number of guidelines for writing shorter 

sentences, but there are a few more you can use to streamline your 

writing further. 

To be clear, sentences must have a sound structure. Here are a few ways 

to ensure yours do. 

The natural word order of English speakers is subject-verb-object. Your 

sentences will be clearer if you follow this order as closely as possible. 

In disclosure documents, this order is frequently interrupted by 

modifiers. For example: 

before 

Holders of the Class A and Class B-1 certificates will be entitled 

to receive on each Payment Date, to the extent monies are available 

therefor (but not more than the Class A Certificate Balance or 

Class B-1 Certificate Balance then outstanding), a distribution. 

after 

Class A and Class B-1 certificate holders will receive a distribution 

on each payment date if cash is available on those dates for their 

class. 

before 

The following description of the particular terms of the Notes 

offered hereby (referred to in the accompanying Prospectus as 

the “Debt Securities”) supplements, and to the extent inconsistent 

therewith replaces, the description of the general terms and provisions of the Debt Securities set forth in the Prospectus, to which 

description reference is hereby made. 

after 

This document describes the terms of these notes in greater detail 

than our prospectus, and may provide information that differs from 

our prospectus. If the information does differ from our prospectus, 

please rely on the information in this document. 

32 a plain english handbook 
Write using “if-then” conditionals 

Conditional statements are very common in disclosure documents— 

although they are rarely written that way. When we rewrote the last 

example as a conditional, we followed the natural English word order 

very closely. That’s why the sentence is easier to read. 

Here are four rules of thumb to help you write conditional statements 

effectively: 

• One “if,” one “then”	 When there is only one if and one then, starting 

with the if may spare some of your readers from having to read the 

rest of the sentence. In these cases, the if clause defines who or what 

the “then” clause applies to. 

If you invested in Class A shares, then... 

• One “if,” multiple “thens”	 When there is only one if and more than 

one then, start with the if and tabulate the thens. 

• Multiple “ifs,” one “then”	 When there is only one then and more than 

one if, start with the then and tabulate the ifs. 

• Multiples “ifs” and “thens”	 When there is more than one if and more 

than one then, you’ll probably need to break it down into more than 

one sentence, taking care to specify which ifs apply to which thens. 

If the information is still unclear, consider presenting the information 

in a table. 

a plain english handbook 33 
“Parallelism reinforces 

grammatically equal elements, 

contributes to ease in reading, 

and provides clarity and 

rhythm.” 

Horner/Webb/Miller 

Harbrace College Handbook 

Keep your sentence structure parallel 

A long sentence often fails without a parallel structure. Parallelism 

simply means ensuring a list or series of items is presented using 

parallel parts of speech, such as nouns or verbs. Note the quotation in 

the margin. 

In this section, we’ve shown each parallel structure we’ve used in bold. 

Here’s an example from a mutual fund prospectus that lacks parallel 

structure: 

before 

If you want to buy shares in Fund X by mail, fill out and sign 

the Account Application form, making your check payable to “The 

X Fund,” and put your social security or taxpayer identification 

number on your check. 

after 

If you want to buy shares in Fund X by mail, fill out and sign 

the Account Application form, make your check payable to “The 

X Fund,” and put your social security or taxpayer identification 

number on your check. 

Here is a more subtle example from another mutual fund prospectus: 

before 

We invest the Fund’s assets in short-term money market securities 

to provide you with liquidity, protection of your investment, and 

high current income. 

This sentence is unparallel because its series is made up of two nouns 

and an adjective before the third noun. It’s also awkward because the 

verb provide is too closely paired with the nominalization protection. 

One logical revision to the original sentence is to change the noun 

series to a verb series. 

after 

We invest in short-term money market securities to provide you 

with liquidity, to protect your investment, and to generate high 

current income. 

All writers, regardless of their degree of expertise, occasionally write 

unparallel sentences. The best way to rid your document of them is to 

read through it once solely to find these mistakes. Reading your document aloud can make unparallel constructions easier to spot. 

34 a plain english handbook 
Steer clear of “respectively” 

How easy is it to read the following sentence once and understand what 

it means? 

before 

The Senior Notes and the guarantee (the “Guarantee”) of the 

Senior Notes by Island Holdings will constitute unsecured senior 

obligations of the Issuer and Island Holdings, respectively. 

after 

The senior notes are an unsecured senior obligation of the issuer, 

while the guarantee of the senior notes is an unsecured senior 

obligation of Island Holdings. 

Whenever you use “respectively,” you force your reader to go back and 

match up what belongs to what. You may be saving words by using 

“respectively,” but your reader has to use more time and read your 

words twice to understand what you’ve written. • 

“Many shortcuts are selfdefeating; they waste the 

reader’s time instead of 

conserving it.” 

Strunk and White 

The Elements of Style 

a plain english handbook 35 
36 a plain english handbook 
7 

Designing 

the Document 

A plain English document reflects thoughtful design choices. The 

right design choices make a document easier to read and its information easier to understand. The wrong design choices can make even a 

well-written document fail to communicate. 

Some documents suffer because no one knew how basic design decisions, like typeface selection, dramatically determine whether or not a 

document is easy to read. Other documents suffer because expensive 

design features give them artistic appeal, but at the cost of obscuring 

the text. In a plain English document, design serves the goal of communicating the information as clearly as possible. 

a plain english handbook 37 
Beginning the design process 

Check with your in-house printing or graphics department—your 

company may have already dealt with design issues in other documents 

or may have skilled designers who can help you with your document. If 

your company or underwriter has a style manual, it typically will define 

a required “look” that specifies typefaces and layouts. 

Since some standards or guidelines in your style manual may have been 

adopted when plain English was not a concern, review them to ensure 

they contribute to good design and ease of reading. 

If you are using a designer, keep the following in mind: 

• Good design requires clear communication between the writer and 

the designer. Keep the lines of communication open and flowing. 

• Take the time to explain the nuances of your document to your 

designer. 

• Don’t move into the design phase until your text is final. Once the 

document is put into page layout software, or once it is at the printer, 

making text changes can be tedious and expensive. 

If you don’t have a design professional, fear not. You can apply many 

of the simple concepts discussed in this chapter to produce a readable, 

visually appealing document. 

While the field of design extends broadly, this chapter covers five basic 

design elements and how they contribute to creating a plain English 

document: 

• hierarchy or distinguishing levels of information 

• typography 

• layout 

• graphics 

• color 

38 a plain english handbook 
Hierarchy
 

Much like an outline, a document’s hierarchy shows how you’ve organized the information and helps the reader to understand the relationship between different levels of information. 

A typical hierarchy in the prospectus might include: 

• the document title 

• section headings (first level) 

• subsection headings (second level) 

• paragraph headings (third level) 

• general text (fourth level) 

Designers use different typefaces in the headings to distinguish these 

levels for the reader. As a rule of thumb, there should be no more than 

six levels in the document, excluding the document’s title. 

You can signal a new level by varying the same typeface or by using 

a different typeface. Here’s a demonstration of how we’ve used different 

typefaces to distinguish levels in this handbook: 

Section headings 


Subsection headings 


General text 

Example headings 

a plain english handbook 39 
“Serif type is more readable 

and is best for text; sans serif 

type is more legible and is best 

used for headlines.” 

Robin Williams 

The Mac Is Not a Typewriter 

Typography 

Although it may seem like a minor decision, your typeface selection 

will be one of the elements that most strongly defines the design and 

readability of your document. 

Kinds of typefaces 

Typefaces come in two varieties: serif and sans serif. 

serif sans serif 

N N 

All serif typefaces have small lines at the beginning or ending strokes 

of each letter. Virtually all newspapers and many magazines use some 

form of serif type for their general text because serif fonts are easier to 

read than sans serif. This handbook uses a serif typeface called Scala 

for general text. Other popular serif typefaces are: Caslon, Century 

Schoolbook, Garamond, and Times. Here are some examples: 

serif 

This is an example of Scala. 

This is an example of Caslon. 

This is an example of Century Schoolbook. 

This is an example of Garamond. 

This is an example of Times. 

Sans serif typefaces lack those small connective lines. The type used for 

most headings throughout this document is a sans serif typeface, Scala 

Sans. Franklin Gothic, Frutiger, Helvetica, and Univers are examples of 

sans serif typefaces. 

sans serif 

This is an example of Franklin Gothic. 

This is an example of Frutiger. 

This is an example of Helvetica. 

This is an example of Univers. 

Generally, serif typefaces are easier to read in documents like this than 

sans serif because the small connective lines of serif help to lead your 

eye more quickly and smoothly over text. It is best to use sans serif 

typefaces in small quantities—for emphasis or headings, but not for 

general text. Both serifs and sans serifs work well for headings. 

40 a plain english handbook 
Selecting the right typeface 

When choosing a typeface, think carefully about where the typeface 

will appear in the document. For example, will it be general text, or will 

it apply to information that needs to be highlighted? Will it introduce 

a section? 

Some typefaces are harder to read than others and were never intended 

for text. Typefaces like Bodoni Poster or other bold, italic, or condensed 

typefaces were designed for headlines or for large display type. These 

examples show how difficult it is to read text in these typefaces. 

Bodoni Poster 

Justified text was the style for many years—we 

grew up on it. But there has been a great deal of 

research on readability (how easy something is to 

read) and it shows that those disruptive, inconsistent gaps between the words inhibit the flow of 

reading. Besides, they look dumb. Keep your eyes 

open as you look at professionally-printed work... 

and you’ll find there’s a very strong trend now to 

align type on the left and leave the right ragged. 

Robin Williams, The Mac Is Not a Typewriter 

Franklin Gothic Condensed 

Justified text was the style for many years—we grew up on it. 

But there has been a great deal of research on readability (how easy 

something is to read) and it shows that those disruptive, inconsistent 

gaps between the words inhibit the flow of reading. Besides, they look 

dumb. Keep your eyes open as you look at professionally-printed 

work...and you’ll find there’s a very strong trend now to align type on 

the left and leave the right ragged. 

Robin Williams, The Mac Is Not a Typewriter 

You can mix different typefaces, but do so with discretion; not all typefaces work well together. Mixing a serif and sans serif, as we have done 

in this handbook, can look good and create a clear contrast between 

your levels. Mixing two serif or two sans serif typefaces can look like a 

mistake. As a general rule, do not use more than two typefaces in any 

document, not including the bold or italic versions of a typeface. 

a plain english handbook 41 
Type measurement 

All typefaces are measured in points (pts). But don’t assume that different typefaces in the same point size are of equal size. For example, here 

are four typefaces set in 11pt: 

This is an example in 11pt. Franklin Gothic 

This is an example in 11pt. Century Schoolbook 

This is an example in 11pt. Garamond 

This is an example in 11pt. Helvetica 

This is an example in 11pt. Times 

Choose a legible type size 

A point size that is too small is difficult for everyone to read. A point size that is 

too large is also hard to read. Generally, type in 10pt–12pt 

is most common. But as you can see from the examples above, some 

typefaces in 11pt will strain some readers. If you have special concerns 

about legibility, especially for an elderly audience, you should consider 

using 12pt or larger. 

42 a plain english handbook 
Emphasizing text 

It’s common in disclosure documents to see blocks of text in bold and 

uppercase letters. The capitalization and bold type attempt to catch the 

reader’s attention. Unfortunately, those capitals make the text difficult 

to read. All uppercase sentences usually bring the reader to a standstill 

because the shapes of words disappear, causing the reader to slow down 

and study each letter. Ironically, readers tend to skip sentences written 

in all uppercase. 

To highlight information and maintain readability, use a different size 

or weight of your typeface. Try using extra white space, bold type, 

shading, rules, boxes, or sidebars in the margins to make information 

stand out. In this handbook we use dotted rules to highlight the examples. Whatever method you choose to highlight information, use it 

consistently throughout your document so your readers can recognize 

how you flag important information. 

before 

THE SECURITIES AND EXCHANGE COMMISSION HAS 

NOT APPROVED OR DISAPPROVED THESE SECURITIES 

OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR 

COMPLETE. ANY REPRESENTATION TO THE CONTRARY 

IS A CRIMINAL OFFENSE. 

after 

The Securities and Exchange Commission has not approved or 

disapproved these securities or determined if this prospectus is truthful 

or complete. Any representation to the contrary is a criminal offense. 

after 

The Securities and Exchange Commission has not approved 

or disapproved these securities or determined if this prospectus 

is truthful or complete. Any representation to the contrary is a 

criminal offense. 

“...words consisting of only 

capital letters present the 

most difficult reading— 

because of their equal height, 

equal volume, and, with most, 

their equal width.” 

Josef Albers 

Interaction of Color 

a plain english handbook 43 
“...when everything 

(background, structure, 

content) is emphasized, 

nothing is emphasized; 

the design will often be 

noisy, cluttered, and 

informationally flat.” 

Edward Tufte 

Visual Explanations 

Layout 

Designers think carefully about white space, column width, linespacing, 

and paragraph length. These design elements determine whether reading is easy or becomes too much of a physical or mental chore. 

Use white space effectively 

Generous use of white space on the page enhances readability, helps 

to emphasize important points, and lightens the overall look of the 

document. White space especially affects the readers of disclosure 

documents because these documents usually feature dense blocks of 

impenetrable text. 

You should fight the impulse to fill up the entire page with text or 

graphics. A wide left or right margin can make the document easier 

to read. The use of white space between sections or subsections helps 

readers recognize which information is related. 

Use left justified, ragged right text 

Research shows that the easiest text to read is left justified, ragged right 

text. That is, the text is aligned, or flush, on the left with a loose, or 

ragged, right edge. The text in this handbook is set left justified, ragged 

right. 

Fully justified text means both the right and left edges are flush, or 

even. When you fully justify text, the spacing between words fluctuates 

from line to line, causing the eye to stop and constantly readjust to the 

variable spacing on each line. Currently, most disclosure documents 

are fully justified. This, coupled with a severe shortage of white space, 

makes these documents visually unappealing and difficult to read. 

Be especially wary of centering text, or using text to form a shape or 

design. Uneven margins may make a visual impact, but they make 

reading extremely difficult. 

44 a plain english handbook 
recommended: left justified, ragged right 

Justified text was the style for many years—we grew up on it. 

But there has been a great deal of research on readability (how easy 

something is to read) and it shows that those disruptive, inconsistent gaps between the words inhibit the flow of reading. Besides, 

they look dumb. Keep your eyes open as you look at professionallyprinted work...and you’ll find there’s a very strong trend now to 

align type on the left and leave the right ragged. 

not recommended: fully justified text 

Justified text was the style for many years—we grew up on it. But 

there has been a great deal of research on readability (how easy something is to read) and it shows that those disruptive, inconsistent gaps 

between the words inhibit the flow of reading. Besides, they look 

dumb. Keep your eyes open as you look at professionally-printed 

work...and you’ll find there’s a very strong trend now to align type on 

the left and leave the right ragged. 

not recommended: centered text 

Justified text was the style for many years—we grew up on it.
 

But there has been a great deal of research on readability 


(how easy something is to read) and it shows that those
 

disruptive, inconsistent gaps between the words 


inhibit the flow of reading. Besides, they look dumb. 


Keep your eyes open as you look at professionally-printed 


work...and you’ll find there’s a very strong trend now to align type
 

on the left and leave the right ragged.
 

a plain english handbook 45 
Use linespacing to lighten the page 

Linespacing, or “leading” (rhymes with sledding), refers to the amount 

of space between lines of text. Leading controls the density and readability of the text. Just as type is measured in points, so is leading. 

A type description of 12/16 means that 12pt type has been set with 4pts 

of additional leading between the lines. Generous leading can give 

a long paragraph a lighter, “airier” feeling and make it easier to read. 

Avoid setting type without any additional leading (such as 10/10 or 

12/12), sometimes referred to as being “set solid.” Typically, you should 

allow at least 2pts of leading between lines of type. You may want to 

add more leading, depending on the “airiness” you would like the 

document to have. In this document, for ease of reading, the general 

text has been set at 11/16, and most examples have been set at 10/12. 

Review the following examples to see how leading affects readability. 

11/11 

Justified text was the style for many years—we grew up on it. 

But there has been a great deal of research on readability (how easy 

something is to read) and it shows that those disruptive, inconsistent gaps between the words inhibit the flow of reading. Besides, 

they look dumb. Keep your eyes open as you look at professionallyprinted work...and you’ll find there’s a very strong trend now to 

align type on the left and leave the right ragged. 

11/13 

Justified text was the style for many years—we grew up on it. 

But there has been a great deal of research on readability (how easy 

something is to read) and it shows that those disruptive, inconsistent gaps between the words inhibit the flow of reading. Besides, 

they look dumb. Keep your eyes open as you look at professionallyprinted work...and you’ll find there’s a very strong trend now to 

align type on the left and leave the right ragged. 

11/15 

Justified text was the style for many years—we grew up on it. 

But there has been a great deal of research on readability (how easy 

something is to read) and it shows that those disruptive, inconsistent gaps between the words inhibit the flow of reading. Besides, 

they look dumb. Keep your eyes open as you look at professionallyprinted work...and you’ll find there’s a very strong trend now to 

align type on the left and leave the right ragged. 

46 a plain english handbook 
Keep lines to a reasonable length 

A comfortable line length for most readers is 32 to 64 characters. Any
 

longer than that, and your readers will lose their place when they read
 

from line to line. A safe rule to follow is: the smaller the type size, the
 

shorter the line length. This is why when you pick up any newspaper,
 

magazine, or large book, you’ll rarely see text that goes from one side of
 

the page clear to the other, as you do in disclosure documents.
 

Columns also help your readers to move quickly and easily through
 

large amounts of text. An average column width can vary from 25–40
 

characters. Remember to use ample white space between columns, too. 


don’t 

Justified text was the style for many years—we grew up on it. But there has been a great deal of research 

on readability (how easy something is to read) and it shows that those disruptive, inconsistent gaps between 

the words inhibit the flow of reading. Besides, they look dumb. Keep your eyes open as you look at professionally-printed work...and you’ll find there’s a very strong trend now to align type on the left and leave the 

right ragged. 

do 

Justified text was the style for many years—we grew up on it. 


But there has been a great deal of research on readability (how easy
 

something is to read) and it shows that those disruptive, inconsistent gaps between the words inhibit the flow of reading. Besides,
 

they look dumb. Keep your eyes open as you look at professionally-


printed work...and you’ll find there’s a very strong trend now to
 

align type on the left and leave the right ragged. 


do 

Justified text was the style for many Besides, they look dumb. Keep your 

years—we grew up on it. But there has eyes open as you look at professionallybeen a great deal of research on read- printed work...and you’ll find there’s a 

ability (how easy something is to read) very strong trend now to align type on 

and it shows that those disruptive, the left and leave the right ragged. 

inconsistent gaps between the words 

inhibit the flow of reading. 

a plain english handbook 47 
Sidebars, like this one, are a 

handy way to convey information that might muddy the 

general text. Try to keep your 

sidebars to “snippets” of information. 

Keep paragraph length relatively short 

To reduce dense text, keep paragraphs as short as possible. Even though 

paragraph length is determined by content, here are some design tips 

that can help to lighten a long paragraph. 

Use bullets to list information wherever possible. This makes information easier to absorb in one quick glance, as the following illustrates: 

before 

The funds invest mainly in the stocks of U.S. and foreign companies that are showing improved earnings and that sell at low prices 

relative to their cash flows or growth rates. The Fund also invests 

in debt, both investment grade and junk bonds, and U.S Treasury 

securities. 

after 

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. 

Use tables to increase clarity 

Use tables to increase clarity and cut down text. Tables often convey 

information more quickly and clearly than text. The information in this 

table is more easily grasped in a table than in narrative form: 

before 

Our investment advisory agreements cover the Growth Fund, 

International Fund, Muni Fund, Bond Fund, and the Money Market 

Fund. The effective date for agreements for the Growth Fund and 

the International Fund is June 1, 1993, and for the Muni Fund, 

Bond Fund and Money Market Fund, June 1, 1994. 

after 

Our Investment Advisory Agreement covers these funds: 

Investment Advisory Agreement 

effective date Fund name 

June 1, 1993 Growth Fund 

International Fund 

June 1, 1994 Muni Fund 

Bond Fund 

Money Market Fund 

48 a plain english handbook 
Graphics 

Graphics often illuminate information more clearly and quickly than 

text. This section introduces some basic guidelines about using graphics in your document. To learn more, books and articles cover the topic 

in rich and rewarding detail. The best known work, The Visual Display 

of Quantitative Information, by Edward R. Tufte, provides practical advice 

on creating graphics. In the introduction of his book, he writes about 

the importance and value of graphics: 

At their best, graphics are instruments for reasoning about quantitative information. Often the most effective way to describe, explore, 

and summarize a set of numbers—even a very large set—is to 

look at pictures of those numbers. Furthermore, of all methods for 

analyzing and communicating statistical information, well-designed 

data graphics are usually the simplest and at the same time the 

most powerful. 

On page 51 of his book, Tufte formulates a number of basic principles 

to follow in creating excellent graphics. Among them are these: 

Graphical excellence is that which gives to the viewer the greatest 

number of ideas in the shortest time with the least ink in the smallest 

space. 

And graphical excellence requires telling the truth about data. 

A few experts have studied the use of graphics in securities documents, 

isolating the areas presenting the most problems. We can boil down 

their advice to these guidelines. 

a plain english handbook 49 
Keep the design simple 

Keep the design of any graphic as simple as possible. Pare away any 

non-essential design elements so the data stands out. Think of it this 

way: as much of the ink as possible in a graphic should deal with a 

data point and not decoration. Some of the worst mistakes occur when 

design elements interfere with the clear presentation of information, 

such as needless 3-D effects, drop shadows, patterns, and excessive grid 

lines. Don’t let a design element turn into what Tufte calls “chartjunk.” 

These examples show how a 3-D bar graph provides initial visual 

appeal, but is harder to read and understand than a straightforward 

presentation of the same information. The multiple lines of the 3-D 

bars confuse some readers because the front of the bars appear to have 

a lower value than the back of the bars. 

before 

$0 

$10 

$20 

$30 

$40 

$50 

$60 

1997 Quarterly Sales Revenue in millions 

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 

$36 

$45 

$32 

$49 

$60 

$50 

$40 

$30 

$20 

$10 

$0 

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 

1997 Quarterly Sales Revenue in millions 

after 

50 a plain english handbook 
Check proportions of visuals 

Generally, you should avoid graphics that start at a non-zero baseline, 

because they distort differences by destroying correct proportions. 

Compare these two bar charts to see how the non-zero baseline can 

mislead the reader as to the magnitude of change from quarter to 

quarter. 

before after 

$25 

$30 

$35 

$40 

$45 

$50 

$55 

1997 Quarterly Sales Revenue 

in millions 

Q1 Q2 Q3 Q4 

$36 

$45 

$32 

$49 

$0 

$10 

$20 

$30 

$40 

$50 

$60 

1997 Quarterly Sales Revenue 

in millions 

Q1 Q2 Q3 Q4 

$36 

$45 

$32 

$49 

“Extensive studies of annual 

reports of major corporations 

in the United States and 

the United Kingdom have 

shown that about 25 percent 

of the graphs they contain 

are distorted substantially.” 

Alan J. Davis 

Graphical Information: 

Where to Draw the Line 

Draw graphics to scale 

Any graphic should be proportionately correct or drawn to scale. 


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.
 

Be consistent when grouping graphics 

If you group graphics side-by-side, avoid changing your scale from one 

graphic to another, as in the examples above. Also, lining up three 

graphics that present data in billions, millions, then dollars can mislead 

the reader. 

a plain english handbook 51 
Don’t reverse time 

In graphics showing information over time, time should flow forward, 

not backward. In these examples, even though the first graphic is 

clearly labeled, it gives a false visual impression that earnings are going 

down over time rather than up. 

before 

Annual Sales Revenue 

in millions 

$200 

$162 

$123 

$87 

$150 

$100 

$50 

$0 

1997 1996 1995
 

after 

Annual Sales Revenue 

in millions 

$200 

$150 

$100 

$50 

$0 

$162 

$87 

$123 

1995 1996 1997 

Organize data to hasten insights 

Choose an organization that helps the reader grasp information and 

comparisons quickly. For instance, if you have a list of foreign stock 

markets showing their returns in one year, list them in descending 

order by the magnitude of their returns instead of in alphabetical order. 

before
 

1994 Foreign Markets 

Total Returns in U.S. dollars 

Argentina –23.6 %
 

Brazil +64.3
 

Greece + 0.6
 

Hong Kong –28.9
 

Indonesia –26.3
 

Malaysia –20.2
 

Mexico – 39.7
 

Philippines – 10.1
 

Singapore + 5.8
 

Turkey – 50.5
 

after
 

1994 Foreign Markets 

Total Returns in U.S. dollars 

Brazil +64.3 %
 

Singapore + 5.8
 

Greece + 0.6
 

Philippines – 10.1
 

Malaysia –20.2
 

Argentina –23.6
 

Indonesia –26.3
 

Hong Kong –28.9
 

Mexico – 39.7
 

Turkey – 50.5
 

52 a plain english handbook 
Integrate text with graphics 

A graphic and its text should be together. You don’t want to break your 

reader’s concentration by separating the two, forcing your reader on a 

detour to another page in search of the graphic that goes with the text. 

Think twice about pie charts 

According to Tufte, “...the only worse design than a pie chart is several 

of them....” Pie charts can be useful in illustrating parts of a whole, but 

not when you divide the pie into more than 5 or 6 slices. 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. 

Don’t forget your typography 

When choosing a typeface for text such as axis labels, consider 

using a sans serif typeface if the type is small and the text is short in 

length. If you want to insert a note or explanation directly on the graphic, use a serif font if the text is long. Continue to use upper and lowercase type for increased legibility. The guidelines for good typography we 

discussed earlier still apply when creating graphics. 

Trust your eye 

Finally, one guideline rises above all others in importance and rests 

squarely with you. Cultivate an appreciation of graphics and then trust 

your eye. If a graphic seems unclear or unhelpful to you, no matter 

how many “guidelines” it follows, it probably is. 

Graphics communicate numbers and concepts visually. You turn to 

graphics when they stimulate a deeper or quicker understanding and 

appreciation of a situation than words alone. To create a good graphic, 

you must study the design critically and assess whether it conveys 

information honestly, accurately, and efficiently. 

a plain english handbook 53 
Color 

Black is a color 

The majority of your documents will be produced in black and white. 

When designing these documents, it’s easy to forget that you are using 

a color: black. Since black is such a powerful color, balancing it on the 

page can be a tightrope act: too little emphasis can grey-out the page, 

too much can blacken it. 

If you are using only black, your use of type is usually the way you 

balance the page’s color. Some typefaces are heavier or lighter than 

others, and most type families are available in varying weights. For 

example: 

heavy: Times Extra Bold 

less heavy: Times Bold 

lighter: Times Semi Bold 

lighter still: Times Regular 

heavy: Univers Black 

less heavy: Univers Bold 

lighter: Univers Regular 

lighter still: Univers Light 

Choosing the proper combinations of type weights will help to make 

your document look more inviting. 

Some additional ways to introduce visual appeal to a one-color document are through: 

• shading 

• graphics 

• rules or lines 

• colored paper stocks 

Again, your use of these elements should not overwhelm or distract 

from the legibility of your text. • 

54 a plain english handbook 
Time-Saving Tips 

Following are some tips that have saved time for those who routinely 

rewrite documents in plain English: 

Photocopy the document, single sided, on 11" x 17" paper (ledger paper) 

to 120% of its original size. This gives you room to make notes in the 

margins and helps to save your eyesight. Keep your original document 

handy. You’ll use it again later. 

Read through the ledger-sized copy and take notes. In the margin of 

each paragraph, jot down the main and supporting points. (We suggest 

using a pencil unless you’re one of those people who does crossword 

puzzles in ink.) If you can’t find these points too easily, it may mean the 

paragraph is a hodgepodge of unrelated topics. 

This stage of the process can be “space-consuming.” In your workspace 

or in a conference room, tape or tack the pages of your document to the 

wall. If it’s too long, you may want to spread out just your outline and 

summary. 

Then, thinking of your investors, physically move the pages into the 

order that makes the most sense. If only parts of pages need to be 

moved, cut them out and move just the parts. Remember to group like 

information together. 

a plain english handbook 55 

8
 
When you start to reorder your document by moving pages or parts of 

pages, write on the page or section: 

•	 where it appeared in the original document (the page number and 

paragraph, if applicable); and 

•	 a number or letter to indicate its place in the new draft. 

It’s a good idea to keep the notes and questions you wrote in the margins distinct from your cross-reference marks by writing them in a different color. Use colored pencils, since it’s likely you’ll move sections 

around more than once. 

Once you have finished physically reorganizing the document, you may 

want to outline the new organization. On a separate piece of paper, 

write the names for the new sections you created. Under each section 

name, write down its major elements. This is the outline of your 

plain English draft and, with some revisions, will become your table 

of contents. 

Keep in mind that the most effective outlines are more like sketches— 

just detailed enough to set priorities and create logical relationships. 

Next to each entry on your outline, be sure to note where this information appeared in the original document. This is very important. Crossreferencing accurately now may save you hours of backtracking later. 

Tape your reordered sections on blank pieces of ledger size paper and 

photocopy them. This will be the master document from which you’ll 

rewrite. As you rewrite, each time you complete a sentence or 

paragraph, draw a line through it in pencil. This way you’ll be sure to 

account for all the original content in your rewrite. • 

56 a plain english handbook 
Using Readability 

Formulas 

and Style Checkers 

Readability formulas determine how difficult a piece of writing is to 

read. However, you should be aware of a major flaw in every readability 

formula. 

No formula takes into account the content of the document being 

evaluated. In other words, no formula can tell you if you have conveyed 

the information clearly. For the most part, they count the numbers of 

syllables and words in a sentence and the number of sentences in the 

sample. Of course, if you applied a readability formula to a traditional 

disclosure document, it would fail miserably. But keep in mind that by 

some formulas’ calculations, Einstein’s theory of relativity reads at a 

5th grade level. 

Some computerized style checkers analyze your grammar and identify 

the passive voice. They may suggest ways to make your writing more 

“readable.” Take their suggestions as just that—suggestions. The final 

test of whether any piece of writing meets its goal of communicating 

information comes when humans read it. • 

a plain english handbook 57 

9
 
58 a plain english handbook 
Evaluating the 

Document 

You can evaluate your document by testing it with a focus group. 

Experts call this “audience-centered” testing because it focuses on the 

interaction between a particular document and a representative sample 

of its readers. While the results are reliable, focus groups require time 

and money. 

Focus group testing tends to work better with shorter documents or 

portions of longer ones. You can also test the portions of your document that you plan to use repeatedly. At the very least, you’ll have helpful feedback on the sections that investors are most likely to read and 

on the language that appears most frequently in your disclosure documents. Based on the test results, you can isolate the parts that cause 

the most confusion and fix them. 

If you don’t have the budget to test your document formally through 

focus groups, improvise. Ask individuals in your office who most 

closely resemble your investors to read your draft document and listen 

closely to their reactions. Ask others who have some distance from 

the project to read it. A fresh pair of eyes often picks up the “obvious” 

problems that those who have worked with the document miss. • 

a plain english handbook 59 

10
 
60 a plain english handbook 
11
 

Reading List 

If you want more information on how to write in plain English, 

we’ve listed just a few of the many resources available, including those 

from the SEC. You may want to visit your local library to review these 

books or a broader selection. Goldstein and Lieberman’s book, The 

Lawyer’s Guide to Writing Well, includes a comprehensive list of books 

about legal writing. We are not endorsing any of these books, but have 

included them as a resource for your convenience. 

Claire Kehrwald Cook, Line by Line 

(Houghton Mifflin, 1985). 

Alan J. Davis, Graphs and Doublespeak, Quarterly Review of Doublespeak, 

Volume XVIII, Number 4, July 1992. 

Bryan A. Garner, The Elements of Legal Style 

(Oxford University Press, 1991). 

_______, A Dictionary of Modern Legal Usage 

(Oxford University Press, 2nd ed., 1995). 

Tom Goldstein and Jethro K. Lieberman, The Lawyer’s Guide 

to Writing Well 

(University of California Press, 1989). 

Karen Elizabeth Gordon, The Transitive Vampire: A Handbook 

of Grammar for the Innocent, the Eager, and the Doomed 

(Times Books, 1984). 

_______, The New Well-Tempered Sentence, A Punctuation Handbook 

for the Innocent, the Eager, and the Doomed 

(Ticknor & Fields, 1993). 

a plain english handbook 61 
William Lutz, The New Doublespeak: Why No One Knows 

What Anyone’s Saying Anymore 

(HarperCollins, 1996). 

David Mellinkoff, Legal Writing: Sense & Nonsense 

(West Publishing Company, 1982). 

William Strunk, Jr., and E.B. White, Elements of Style 

(Macmillan, 3rd rev. ed., 1981). 

Edward R. Tufte, The Visual Display of Quantitative Information 

(Graphics Press, 1983). 

Robin Williams, The Mac Is Not a Typewriter 

(Peachpit Press, 1990). 

Richard C. Wydick, Plain English for Lawyers 

(Carolina Academic Press, 2nd ed., 1985). 

William Zinsser, On Writing Well 

(Harper & Row, 4th ed., 1988). 

SEC publications 

Before & After Plain English Examples and Sample Analyses 

(SEC Division of Corporation Finance, April 4, 1998). 

Plain English Pilot Program: Selected Plain English Samples 

(SEC Division of Corporation Finance, January 28, 1998).
 

Securities Act Release No. 33-7380, Plain English Disclosure, 


proposing release, (January 14, 1997) 62 FR 3512 (January 21, 1997).
 

Securities Act Release No. 33-7497, Plain English Disclosure, 


adopting release, (January 28, 1998) 63 FR 6370 (February 6, 1998). •
 

62 a plain english handbook 
12 

Keeping in Touch 

with Us 

We hope that this handbook will prove useful to you in drafting and 

creating plain English documents. Although we have drawn the suggestions in the handbook from those who have written plain English 

documents and from experts in the field, we realize that much more 

will be learned along the way that can benefit all of us. 

We would appreciate receiving your suggestions on how we can 

improve this handbook. We would also like to collect as many examples 

of “befores” and their plain English “afters” as possible, as well as any 

tips that helped you save time and energy. 

Please forward your suggestions and “before” and “after” examples to: 

Nancy M. Smith 

Director 

Office of Investor Education and Assistance 

SEC 

450 5th Street, N.W. 

Washington, D.C. 20549 • 

a plain english handbook 63 
64 a plain english handbook 
Appendix A Plain English at a Glance 

Plain English means creating 

a document that is 

•	 visually inviting, 

•	 logically organized, and 

•	 understandable on the first 

reading. 

You create a plain English 

document by 

•	 knowing your readers, and 

•	 presenting information your 

readers need in an order 

they’ll understand. 

Summary of the plain English rules
 

Rule 421(b)
 

Entire Prospectus 

Clear, concise, and 

understandable 

•	 short sentences whenever 

possible 

•	 bullet lists whenever possible 

•	 descriptive headers and subheaders 

•	 avoid relying on glossaries and 

defined terms 

•	 avoid legal and highly 

technical business terms 

Note 

Avoid: 

•	 legalistic, overly complex presentations 

•	 vague boilerplate 

•	 excerpts from legal documents 

•	 repetition 

This is a summary, so please read 

the entire rule to make sure you 

comply with every aspect of it. 

Rule 421(d)
 

Cover and Back Pages, Summary, 

and Risk Factors 

Use plain English principles in 

the organization, language, and 

design of documents 

Substantially use: 

•	 short sentences 

•	 definite, concrete, everyday 

words 

•	 active voice 

•	 tables and bullet lists 

•	 no legal jargon, highly 

technical business terms 

•	 no multiple negatives 

Entire Prospectus—Design 

In designing the entire 

prospectus: 

•	 may use pictures, logos, 

charts, graphs, or other design 

elements 

•	 encouraged to use tables, 

schedules, charts, and graphics 

for financial data 

•	 must draw graphs and charts 

to scale 

•	 cannot use misleading design 

and information 

a plain english handbook 65 
• • • • • 

§230.421 

Presentation of information in prospectuses 

(b) You must present the information in a prospectus in a clear, concise 

and understandable manner. You must prepare the prospectus 

using the following standards: 

( ) Present information in clear, concise sections, paragraphs, and 

sentences. Whenever possible, use short, explanatory sentences 

and bullet lists; 

(2) Use descriptive headings and subheadings; 

(3) Avoid frequent reliance on glossaries or defined terms as the 

primary means of explaining information in the prospectus. 

Define terms in a glossary or other section of the document 

only if the meaning is unclear from the context. Use a glossary 

only if it facilitates understanding of the disclosure; and 

(4) Avoid legal and highly technical business terminology. 

Note to §230.421(b): 

In drafting the disclosure to comply with this section, you should avoid 

the following: 

. Legalistic or overly complex presentations that make the substance 

of the disclosure difficult to understand; 

2.	 Vague “boilerplate” explanations that are imprecise and readily 

subject to different interpretations; 

3.	 Complex information copied directly from legal documents without 

any clear and concise explanation of the provision(s); and 

4.	 Disclosure repeated in different sections of the document that 

increases the size of the document but does not enhance the quality 

of the information. 

66	 a plain english handbook 
• • • • • 

(d) ( ) To enhance the readability of the prospectus, you must
 

use plain English principles in the organization, language, and 

design of the front and back cover pages, the summary, and the 

risk factors section. 

(2) You must draft the language in these sections so that at a minimum it substantially complies with each of the following plain 

English writing principles: 

(i) Short sentences; 

(ii) Definite, concrete, everyday words; 

(iii) Active voice; 

(iv) Tabular presentation or bullet lists for complex material, 

whenever possible; 

(v) No legal jargon or highly technical business terms; and 

(vi) No multiple negatives. 

(3) In designing these sections or other sections of the prospectus, 

you may include pictures, logos, charts, graphs, or other design 

elements so long as the design is not misleading and the 

required information is clear. You are encouraged to use tables, 

schedules, charts and graphic illustrations of the results of 

operations, balance sheet, or other financial data that present 

the data in an understandable manner. Any presentation must 

be consistent with the financial statements and non-financial 

information in the prospectus. You must draw the graphs 

and charts to scale. Any information you provide must not be 

misleading. 

Instruction to §230.421 

You should read Securities Act Release No. 33-7497 (January 28, 1998) 

for information on plain English principles. • 

a plain english handbook 67 
68 a plain english handbook 
Appendix B Plain English Examples 

This appendix contains “before” and “after” examples from participants 

in the Division of Corporation Finance’s plain English pilot. The 

Division’s staff added marginal notes to show how aspects of the plain 

English rules apply to specific documents. 

These annotated examples are excerpted from the booklet, Before & After 

Plain English Examples and Sample Analyses, prepared by the Division 

of Corporation Finance. Although we revised the presentation and 

wording of the marginal notes in this appendix, the filings remain 

identical to those from the booklet. To get a complete copy of the booklet, please call the SEC’s public reference room at (202) 942-8090. 

Differences between the proposed and final amendments to Item 501 

When the issuers prepared these documents, they relied on staff 

interpretations for filings in the plain English pilot and the proposed 

amendments to Item 501. 

The following information was not required under Item 501 as 

proposed, but this information is required under Item 501 as adopted: 

• the market(s) and the trading symbol; 

• the underwriter’s over-allotment or similar option, if applicable; 

• a prominent cross-reference to the risk factors section including the 

page number; 

• the following on a total and per share basis, if applicable: 

– the price to the public; 

– the underwriter’s discounts and commissions; and 

– the net proceeds the issuer and selling shareholders receive. 

Examples for illustration purposes only 

We are providing these examples and marginal notes only to illustrate 

the principles of plain English. We have not made any determination as 

to whether the filings are accurate or complete. You are responsible for 

the substance in your plain English filings. To understand the plain 

English rules fully, you must read the proposing and adopting releases: 

• the proposing release—Release no. 33-7380; and 

• the adopting release—Release no. 33-7497. 

Both releases are available from the SEC’s Public Reference Room and 

our web site at www.sec.gov. 

We collected many filings 

from the Division’s plain 

English pilot in one book. 

You can get a photocopy of 

this 756-page book, Plain 

English Pilot Program: Selected 

Plain English Samples, from 

the SEC’s Public Reference 

Room or a printed copy from 

Bowne Publishing in New 

York City. (The SEC does not 

endorse Bowne, nor do we 

have a business relationship 

with them.) 

a plain english handbook 69 
Before MBNA cover page, core prospectus
 

Fully-justified text and lengthy 

paragraphs give page a dense, 

block-like appearance. 

Abstract terms and legal jargon 

prevalent 

A lot of passive voice, adding to 

sentence length 

Eliminate defined terms from 

the cover page. 

Long sentence–60+ words 

Why capitalize these common 

terms? 

Long sentence–50+ words 

Many long sentences– 

40+ words 

Centered text and all capital 

letters are hard to read. 

Legends are in legalese. 

Legalistic tone–does Item 501 

require all this information? 

All information is presented the 

same way: What does this 

page focus my attention on? 

Sans serif font is hard to read. 

Text runs in long lines across 

the page. 

Note: When MBNA filed this disclosure document, they relied on the SEC 

rules that were in effect at that time. 

70 a plain english handbook 
MBNA cover page, core prospectus After
 

Ample white space surrounds 

key information and makes 

page visually inviting. 

Page layout highlights cross 

reference to risk factors. 

Clear sentences are in active 

voice with concrete, everyday 

language. 

No lengthy, block-like 

paragraphs 

Information presented in three 

main categories: 

• the trust 

• the certificates 

• the certificateholders 

No defined terms 

Common terms, like classes, 

are not capitalized. 

Long sentences are put into 

bullet lists. 

Left justified text and shorter 

line lengths are easy to read. 

Serif typeface is easier to read 

than sans serif. 

Legends in plain English and 

lowercase are easier to read 

than all capital letters. 

a plain english handbook 71 
Before Premium Cigars International, cover page
 

Fully justified text creates a 

dense, block-like appearance. 

Eliminate defined terms from 

cover page. 

Is no par value helpful 

information for investors? 

Key information, such as price 

per share, is not distinguished 

from general text. 

Cross reference draws readers’ 

attention away from key 

information. 

All capital letters are hard 

to read. 

Legend is in legalese. 

Some legalese is used, like 

set forth and when, as and if 

delivered. 

Offering table, references to 

footnotes, and paragraph 

following the table are legalistic. 

Legalistic tone–does Item 501 

require all this information? 

72 a plain english handbook 
Premium Cigars International, cover page After
 

Only key information on page 

Offering information is clear 

and easy to read. 

Ample white space is visually 

inviting and highlights key 

information. 

Key information, like price per 

share, is highlighted. 

Left justified text eliminates 

block-like appearance. 

Two-column format is easier to 

read than text running across 

page. 

Design and layout highlight 

market and trading symbols. 

Short sentences use concrete, 

everyday terms. 

Language is free from legalese, 

technical language, and 

unnecessary cross references. 

Personal pronouns, while not 

required, enhance readability. 

Legend is in plain English. 

a plain english handbook 73 
Before General Motors Corporation, summary 


Legalese and technical terms, 

like pursuant to the terms 

and conditions set forth, and 

effected largely pursuant to 

transactions, etc. 

Cross reference to definition 

disrupts flow of information; 

meanings of terms in summary 

must be clear from context. 

Terms like certain and 

appropriate are vague, not 

concrete. 

Passive voice–who is 

completing these transactions? 

Parenthetical phrases are 

legalistic and disrupt flow of 

information. 

Little “i”s are legalistic; bulleted 

list would be easier to read. 

Organization of information 

driven by mechanics of 

transactions rather than by 

information shareholders need 

to make a decision. 

Transactions’ effect on shareholders not discussed until 

column two. 

Is detail about GM amending 

its certificate of incorporation 

necessary for the summary? 

74 a plain english handbook 
General Motors Corporation, summary After
 

Information organized from 

shareholders’ perspectives– 

how transactions affect them 

addressed first. 

Active voice helps shareholders 

follow the steps involved in the 

transaction more easily. 

Summary is free of defined terms. 

Concrete, everyday language 

replaces legalese like pursuant 

to the terms and conditions 

set forth and effected largely 

pursuant to transactions, etc. 

Numbers are more readerfriendly than little “i”s. 

Easy to read two-column format 

with left justified margins. 

Personal pronouns, although 

not required, help engage 

shareholders’ attention. 

a plain english handbook 75 
Before Baltimore Gas & Electric Company
 

Paragraphs are lengthy and 

block-like. 

Subheadings are helpful, 

but more would be better. 

Defined below? Where is below? 

Cross reference not helpful. 

Long sentence–85+ words 

Many defined terms with 

definitions elsewhere. 

Can you make meanings clear 

from context? 

Long sentence–90+ words 

Lists embedded in text; 

complex presentation 

Section from body of prospectus
 

76 a plain english handbook 
Baltimore Gas & Electric Company 

Section from body of prospectus 

After
 

Paragraphs are short and 

readable. 

Short sentences–longest 

sentence is 36 words. 

Two-column format and 

left justified text, while not 

required, help make summary 

more reader-friendly. 

More subheadings break up 

dense text and help readers 

navigate their way through 

information easily. 

Defined terms are minimized, 

with meanings of terms clear 

from context. 

Bullet lists help investors read 

and understand this information 

more quickly and easily. 

a plain english handbook 77