The marketing of managed funds has been on ASIC’s radar for some time, and its focus has now shifted to compliance with the design and distribution obligations (DDO). In an industry first, three financial firms have received interim stop orders in response to deficiencies in the target market determination (TMD) for their products.

ASIC says industry has had plenty of time to bed down implementation of the DDO regime and it now has targeted surveillances underway to check whether product issuers and distributors are complying with their DDO.

You can read more about ASIC’s first DDO stop orders here.

Have you got your DDO compliance right?

It is important you get your DDO compliance right:

• Do you understand the principles and guidance set out in ASIC Regulatory Guide 274 Product design and distribution obligations?
• Have you taken on board our Top tips for DDO compliance?

We can help you with—

• preparing for and conducting the first mandatory review of your TMDs, which is due soon (likely by 5 October 2022 – please check your TMDs for the date)
• engaging with your compliance plan auditor about how they intend to approach DDO in your schemes’ next compliance plan audits
• regularly reviewing your product governance policy and assisting you to conduct regular desktop audits of your financial products having regard to the review triggers in your TMDs and any dealings that are not consistent with the TMDs.  

If you need help or have any questions, please reach out to partner Sean McMahon, consultant Jeunesse Meldrum, or a member of our Funds Management team. We can help.