Although the pandemic means ASIC has delayed the commencement date for compliance with the new financial product design and distribution obligations (DDOs) until 5 October 2021, the experience of product issuers in Europe when similar rules were introduced shows there is more work involved in getting ready than initially meets the eye.
Back in February this year, we wrote about proposed guidance from ASIC on how it plans to administer the DDOs. That final guidance is yet to be issued. Here, special counsel Matt Moses explains in practical terms what product issuers need to do to prepare.
The law underlying the DDO regime sets out obligations for product issuers and obligations for distributors.
An issuer's obligations under the new regime drive what needs to happen in practice, so it is worth revisiting what the key obligations are. They are to—
As we noted in our earlier article, an important part of the new regime is developing an appropriate 'Product Governance Framework' around your DDO obligations.
Fund managers should develop an implementation plan, documenting the steps needed to comply with the DDO regime in the context of their own business and their distribution channels.
We are already working with clients to help them understand and develop what is needed.
Examples of some of the key steps and considerations include:
Although ASIC has delayed the commencement date for compliance with the new DDO regime, fund managers need to be on the front foot and develop an implementation plan. Our Funds Management lawyers are working closely with clients to ensure they understand what is required and are available to assist with developing your plan.