The new Design and Distribution Obligations and Product Intervention Powers Legislation means a significant shift in the way fund managers and product issuers develop products for the retail market, including managed funds. Here, partner Elliott Stumm explains ASIC's new product intervention power and what the design and distribution obligations mean for product issuers and distributors.
The intervention power, which came into force in April this year, allows ASIC to make a range of orders to proactively reduce the risk of consumers suffering significant detriment from financial products. Those orders include:
The design and distribution obligations, which will come into force in April 2021, create additional distribution obligations on product issuers and distributors, including to:
Finally, last minute changes to the new laws extended their application to credit facilities provided to retail clients.
Please contact a member of our Funds Management team if you need more information about these changes and how it affects your business.