Comply 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.
Who must comply
Issuers and distributors of retail financial products and credit products.
What triggers it
Issuing or distributing in-scope products.
When due
Continuous; TMDs reviewed periodically and on trigger events.
Evidence required
Documented TMD, distribution monitoring data, significant-dealings register, TMD review records.
Max penalty
Civil penalties to the maximum financial-services regime ($18.2M / 3× benefit / 10% turnover)
Who must comply with this? The applicability test by industry, business structure and size.
Summary
Part 7.8A of the Corporations Act requires issuers and distributors of retail financial products (including credit) to make a target market determination (TMD), distribute consistently with the TMD, report significant dealings inconsistent with it, and review TMDs periodically.
Enforced by
Source legislation
Industries
Topics
Related
- CWLTHProvide a current Product Disclosure Statement (s 1013A)Retail financial product issuers must provide a current PDS before issuing.
- CWLTHReport reportable situations to ASIC within 30 days (RG 78)AFSL/ACL holders must report reportable situations within 30 calendar days of becoming aware.
- 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)?
- Issuers and distributors of retail financial products and credit products.
- What triggers Design and Distribution Obligations (DDO)?
- Issuing or distributing in-scope products.
- When is Design and Distribution Obligations (DDO) due?
- Continuous; TMDs reviewed periodically and on trigger events.
- What is the maximum penalty for Design and Distribution Obligations (DDO)?
- Civil penalties to the maximum financial-services regime ($18.2M / 3× benefit / 10% turnover)
- What evidence is required for Design and Distribution Obligations (DDO)?
- Documented TMD, distribution monitoring data, significant-dealings register, TMD review records.
Source: https://www.asic.gov.au/regulatory-resources/financial-services/. Rules Mate is not a law firm. Always verify against the live regulator source before acting.