The Australian Securities and Investments Commission (ASIC) is seeking public input on draft guidance for the new design and distribution obligations, which will come into effect in April 2021.
“The obligations should drive better business and consumer outcomes,” said Karen Chester, ASIC deputy chair. “They simply require business to design products that meet genuine consumer needs and use distribution channels that will likely get them to the right consumers.”
ASIC released Consultation Paper 325 Design and Distribution Obligations (CP 325) where it outlined its proposed approach to the guidance. The regulator said the draft guidance is principles-based, incorporates working examples, and is consistent with legislation and international practice.
“The design and distribution obligations reinforce fundamental business considerations for firms, their boards, and ultimately their shareholders,” Chester said. “What are the target markets for our financial products? Do our financial products meet the genuine needs of our consumers? Do our distribution channels mean our products will likely get to the right consumers?”
The industry will be given a two-year transition period to meet the new design and distribution obligations.
Submissions are welcome until March 11.
