Australia postpones financial product design, distribution

UK restricts executive pay for companies taking COVID-19 loan
June 01, 2020

The Australian Securities and Investments Commission (ASIC) announced a six-month postponement of the design and distribution obligations (DDO) for financial products until 5 Oct 2021 — from 5 Apr 2021 — due to the economic impact of COVID-19, particularly on the financial system and consumers. 

Click herehttps://www.mercer.com/content/dam/mercer/attachments/global/law-and-policy/gl-2020-australia-postpones-financial-product-design-distribution.pdf

The DDO establishes a new governance regime and follows the Financial System Inquiry’s recommendations:

  • Financial product issuers must identify target markets for their products and consumers, select appropriate distribution channels, and periodically review arrangements to ensure they remain appropriate.
  • Distributors of financial products must establish reasonable controls to ensure products are distributed in accordance with the identified target markets. 

Consultation on draft guidance for the DDO closed in March 2020, and ASIC recently confirmed its aim to publish final guidance in mid-2020. The DDO requirements featured in the Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Act 2019 received royal assent on 5 Apr 2019.

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Paul Shallue
by Paul Shallue

Principal, Mercer Wealth

Fiona Webster
by Fiona Webster

Principal, Mercer’s Law & Policy Group

Stephanie Rosseau
by Stephanie Rosseau

Principal, Mercer’s Law & Policy Group

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