On Friday 11 December, the regulator released the much anticipated final guidance (RG 274) on the Design and Distribution Obligations (DDO). RG 274 sets out ASIC’s expectation of how the regime will operate, as well as their approach to administration. It comes just shy of a year after of the release of the consultation paper and draft regulatory guide, with DDO coming into effect as of 5 October 2021.
The RG takes into consideration the consultation process and feedback received, but has not materially changed. We expect that inclusion of ‘appropriateness requirements’ will lead to issuers bolstering parameters within target market determinations (TMD), but that the infrastructure sitting around that TMD (frameworks, methodologies, and rationales) will remain unchanged.
Below we have set out a number of the key areas for investment managers and superannuation trustees.
Although, as expected, the final RG has not materially changed the implementation of the obligations for issuers and distributors, there is still significant work to be done in preparation for October 2021. Organisations should review their approach to DDO in light of the new RG and make use of the sector-specific examples that ASIC has provided, tailoring them to their own product sets.