What the financial advice industry needs to know about the design and distribution obligations


INSIGHT
Published
Sep 16th '21
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Australian Securities & Investments Commission (ASIC) has released additional information for advice licensees and financial advisers who are authorised representatives to help them prepare for the commencement of the design and distribution obligations (DDOs) on 5 October 2021.

 

The DDOs for issuers and distributors of financial products aim to assist consumers to obtain appropriate products by requiring firms to design financial products to meet the needs of consumers, and to distribute their products in a more targeted manner. The obligations apply to most financial products regulated by the Corporations Act 2001 and the Australian Securities and Investments Commissions Act 2001.

 

In December 2020, ASIC released Regulatory Guide 274 Product design and distribution obligations (RG 274) to provide guidance on the DDOs. To further assist the advice industry, ASIC has today released Information Sheet 264: FAQs: Design and distribution obligations for advice licensees and financial advisers (INFO 264), which summarises some of the most relevant guidance in RG 274.

 

ASIC strongly recommends that advice licensees and financial advisers who are authorised representatives familiarise themselves with RG 274 for more detailed guidance on many of the issues covered in INFO 264.

 

In preparing for the commencement of the DDOs, ASIC also encourages advice licensees and financial advisers who are authorised representatives to engage with the issuers of financial products.

 

ASIC recently announced its approach to the financial services reforms commencing this October, which includes the DDOs. ASIC will take a reasonable approach in the early stages of the reforms provided industry participants are using their best efforts to comply.

 

Download Information Sheet 264: FAQs: Design and distribution obligations for advice licensees and financial advisers

 

Source: © Australian Securities & Investments Commission. Reproduced with permission.

 

ASIC is Australia’s integrated corporate, markets, financial services and consumer credit regulator.