Design and Distribution Obligations
As you may be aware, from 5 October 2021, product issuers, such as Ausbil Investment Management Limited (Ausbil) and distributors (including platforms, licensees, financial advisers) of financial products must comply with the design and distribution obligations as introduced under the Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Act 2019 (DDO).
What is the purpose of DDO?
DDO requires Ausbil and distributors to have a consumer centric approach to the design and distribution of our products so as to help consumers obtain appropriate products. Three ways the obligations help consumers:
- Product issuers need to design financial products that are consistent with the likely objectives, financial situation and needs of the customers for whom they are intended;
- Product issuers and distributors need to take ‘reasonable steps’ to ensure the financial products reach intended consumers in the target market; and
- Product issuers are required to monitor and review their products to ensure that consumers are investing in products likely to be consistent with their objectives, financial situation, and needs.
In order to help consumers obtain appropriate products, Ausbil has created a Target Market Determination (TMD) for each of our financial products.
What are TMDs?
A TMD is a document issued by product issuers, like Ausbil, which:
- describes the class, or type, of customers who the product is appropriate for;
- specifies distribution conditions, if any, to ensure that our products reach consumers in the intended target market;
- specifies events that will require us to review the TMD for our products; and
- outlines the information that distributors must provide to us.
Ausbil has decided to use the Financial Services Council’s TMD template and Ausbil has not made any material adjustments to this template. The TMD includes all reporting requirements Ausbil needs, to ensure we are meeting our obligations under DDO. Please refer to ‘What are the reporting obligations’ below for more information.
Our TMDs will be available via the following channels:
- Ausbil website
- FE Funds
- Iress Xplan
- On request via email email@example.com
What are the reporting obligations?
As a financial adviser you are considered a distributor of Ausbil’s products. Therefore, under DDO, you have an obligation to consider Ausbil’s TMD when you are providing general and personal advice to clients and report certain information back to Ausbil, including any complaints data and any clients that you recommend our products to that are outside the products TMD.
Refer to the below table which outlines your obligations as a Financial Adviser providing personal advice. Please note other responsibilities may apply where you are not providing personal advice.
|Obligation ||Description |
|Target Market - consideration of the TMD || |
- You must consider the TMD when giving personal advice to help meet your best interest duty.
|Dealings/sales outside the TMD || |
- You must notify us of a dealing in our products that is not consistent with the product’s TMD. This does not prevent you from recommending the product, if you deem it appropriate for your client, even though the client is not in the target market.
- To help you meet this obligation, we have updated our application form to capture information for dealings outside of the target market.
- Where you are investing in one of our products via a platform, the platform will have a process for capturing this information and you will be required to complete this process. The platform will provide us with a quarterly report on dealings outside of the product target market.
- You must keep records of dealings outside the TMD for up to seven years.
|Significant dealings/sales outside the TMD || |
- Our TMD’s detail what may constitute a ‘significant dealing’.
- If you believe there has been a ‘significant dealing’ you must report this to us within 10 days of becoming aware of the significant dealing. You must keep records of the details of the significant dealing for up to seven years.
- You must keep records of any significant dealings/sales outside the TMD for up to seven years.
|Complaints Reporting || |
- You must provide us with details of any complaints about our products you receive from your clients.
- We require that any complaints be reported to us within 10 business days following the end of the calendar quarter.
- You should provide all the content of the complaint, having regard to privacy.
- Where a client has invested in one of our products via a platform, you will need to adhere to that platform’s process for complaints reporting.
- You must keep records of the number of complaints for up to seven years.
The above complaints and significant dealings reporting can be sent to:
Ausbil Investment Management Limited
PH: (02) 9259 0200
Our documentation is being updated to reflect DDO. From 5 October 2021, all of the old documents you have relating to products issued by Ausbil should be replaced. You should also update any links you have to digital versions of our documents. This includes (but is not limited to) application forms.
|Key dates ||Event |
|5 October 2021 || |
- DDO come into effect.
- TMDs live and available via channels listed above.
|5 October – 31 December 2021 || |
|10 January 2022 || |
- First report received from distributors 10 days after first quarter end (ie 5 October – 31 December)
- Quarterly complaints reporting and significant dealings can be sent to firstname.lastname@example.org