The design and distribution obligations (DDO) regime has been in effect for over one year now and no doubt you are aware ASIC has targeted surveillances underway to check whether product issuers and distributors are complying with DDO. To date, ASIC has issued 17 interim stop orders in ‘DDO related’ matters and six remain in place. We have been monitoring this activity closely and have compiled some ‘learnings’ and clarifications to share with you about ASIC’s current expectations in relation to compliance with the DDO requirements.
Some of our observations arise from our participation in the Financial Services Council (FSC) DDO Working Groups. Others arise from ASIC feedback we have been privy to as a result of being engaged by managers who have been the subject of ASIC surveillance. We should add that these managers prepared DDO programs/target market determinations (TMDs) themselves but have since engaged with us to assist them in dealing with ASIC. That is, none of the issues we are dealing with have arisen from the approach we originally took when DDO was introduced. However, we are considering ASIC’s feedback carefully, reviewing our approach, and seeing if any adjustments and improvements are recommended to reflect best practice.
Our list of learnings and clarifications is not exhaustive and will be updated from time to time to reflect further guidance from ASIC and as implementation of the DDO regime evolves.
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