Product regulation and ASIC powers

The FPA has been calling for effective product regulation for decades. The commencement of the product design and distribution obligations (DDO) and ASIC’s new product intervention powers on 5 October 2021 was a significant step forward for consumer protection and for financial planners.

OVERVIEW OF DDO REGIME

 Benefits of DDO regime:

• greater protections for consumers
• more transparent information to assist planners in providing quality advice
• product providers held accountable when things go wrong with products.

Requirements – Product providers

• Governance arrangements
• Consumer focused product design processes
• Target Market Determination (TMD) publicly available
• Monitor outcomes, review products and TMD Report
• Report and keep records

Requirements – AFSLs and representatives

• Governance arrangements
• Check if product has or requires a Target Market Determination
• Must consider TMD in product research
• Exempt from ‘reasonable steps’
• Best interest documentation – why it is appropriate for client to be outside the TMD
• Report and keep records 

  GUIDANCE AND QUESTIONS

  Login to FPA Community to access FPA’s member guidance and join the discussion on the DDO requirement for financial planners.

  ASIC INFO 264 – Design and distribution obligations for advice licensees and financial advisers