Design and Distribution Obligations (DDO) — RG 274
Issuers + distributors of retail financial products bound by DDO from 5 October 2021.
Who must comply
AFSL holders issuing or distributing retail financial products + credit products.
What triggers it
Issuing or distributing in-scope retail product.
When due
TMD before first distribution; review on triggers; significant dealings within 10 business days.
Evidence required
TMD; distribution monitoring; significant dealings notifications; periodic review.
Max penalty
—
Effective from
5 October 2021
Who must comply with this? The applicability test by industry, business structure and size.
Summary
Section 994B Corporations Act. Issuers must make TMD identifying class of consumers + review triggers. Distributors must distribute consistently with TMD + report significant dealings outside TMD to issuer + ASIC. RG 274 guides.
Enforced by
Source legislation
Topics
Related
- CWLTHReport reportable situations to ASIC within 30 days (RG 78)AFSL/ACL holders must report reportable situations within 30 calendar days of becoming aware.
- CWLTHComply with Design and Distribution Obligations (DDO)Issuers and distributors of retail financial products must have a Target Market Determination (TMD) and distribute consistently with it.
- CWLTHBan on conflicted remuneration (FOFA)AFSL holders and representatives must not accept conflicted remuneration in connection with retail financial product advice.
- CWLTHLodge a prospectus for offers requiring disclosureOffers of securities to retail investors require a prospectus or OIS lodged with ASIC.
- CWLTHBest interests duty for financial advisers (s 961B-G)Personal advisers must act in client's best interests + meet related obligations.
- CWLTHRegister a Managed Investment Scheme under Ch 5CSchemes with 20+ retail members must be registered with ASIC as MIS.
Frequently asked questions
- Who must comply with Design and Distribution Obligations (DDO) — RG 274?
- AFSL holders issuing or distributing retail financial products + credit products.
- What triggers Design and Distribution Obligations (DDO) — RG 274?
- Issuing or distributing in-scope retail product.
- When is Design and Distribution Obligations (DDO) — RG 274 due?
- TMD before first distribution; review on triggers; significant dealings within 10 business days.
- What evidence is required for Design and Distribution Obligations (DDO) — RG 274?
- TMD; distribution monitoring; significant dealings notifications; periodic review.
Source: https://www.asic.gov.au/regulatory-resources/find-a-document/regulatory-guides/rg-274-product-design-and-distribution-obligations/. Rules Mate is not a law firm. Always verify against the live regulator source before acting.