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 ($16.5M / 3× benefit / 10% turnover)
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 obligations
- CWLTHProvide a current Product Disclosure Statement (s 1013A)Retail financial product issuers must provide a current PDS before issuing.
- CWLTHComply with AFSL general obligations (s 912A)AFSL holders must do all things necessary to ensure financial services are provided efficiently, honestly and fairly.
- CWLTHReport reportable situations to ASIC within 30 days (RG 78)AFSL/ACL holders must report reportable situations within 30 calendar days of becoming aware.
- CWLTHMaintain adequate PI insurance (AFSL holders, RG 126)AFSL holders providing financial services to retail clients must hold adequate professional indemnity insurance.
- CWLTHBan on conflicted remuneration (FOFA)AFSL holders and representatives must not accept conflicted remuneration in connection with retail financial product advice.
- CWLTHMaintain AFCA membership (mandatory external dispute resolution)AFSL + ACL holders must be members of AFCA — sole AU EDR scheme.
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 ($16.5M / 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://asic.gov.au/regulatory-resources/financial-services/product-design-and-distribution/. Rules Mate is not a law firm. Always verify against the live regulator source before acting.