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Design and Distribution Obligations


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Customer-centric product design, distribution and marketing to retail clients

Implications of the New Regime


The recent Royal Commission into Financial Industry Misconduct has shown current process and controls within financial services as well as a flawed "consumer protection" disclosure framework can lead to product sales which are not in the best interest of customers and result in poor consumer outcomes. 


Given the government's increased scrutiny on customer fairness and delivery of improved outcomes to customers, product creators and distributors will be required to establish consumer-centric frameworks that support robust product governance, target market offerings and deliver better value to a class of consumers.

DDO Regulation Key Details

When Does DDO Regulation Start?
Who Does DDO Regulation Apply to?
What is Excluded?
Who/What May Be Included?
Financial Products Under Corps Act
Credit Products Under Credit Act
Financial Products Under ASIC Act
When Does DDO Regulation Start?

DDO Obligations - The new laws are scheduled to take effect from 5 October 2021.


Product Intervention Powers  ("PIP" Legislation), governed by ASIC has already commenced. Using PIP powers, ASIC can intervene to issue stop orders or impose changes on the way a product is marketed. DDO introduces criminal and civil liabilities for product owners that do not comply. 


See here- (Part 6 7A Product intervention orders Provisions)


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Who Does DDO Regulation Apply to?

Financial products

Products that will be affected include financial products directed to retail clients, i.e. insurance, asset management, superannuation and derivatives


Under the law these include:

  • Financial products and securities* where disclosure is required under Part 6D.2 (e.g. hybrid securities) or a product disclosure statement PDS under Part 7.9  of the Corporations Act (e.g. interests in managed investment schemes, general insurance and interests in superannuation funds).
  • Products that are not regulated under Pts 6D.2 or 7.9 of the Corporations Act, but are within the scope of the ASIC Act - expanded definition of ‘financial product’ under ASIC (e.g. credit contracts and short-term credit facilities). ASIC considered responsible lending obligations afforded protection to particular individual transactions whereas the DDO applies to the entire product lifecycle. and
  • Other products prescribed by the Corporations Regulations 2001 as requiring a ‘target market determination’ (TMD).
  • The obligations apply for products launched after the commencement of the regime and products that continue to be issued to consumers.

*As defined under the Corporations Act 2001, the ASIC Act 2001, NCCP Act 2009 and other Regulations duly released.


Visualise Changes Here


Search our Codified ASIC DDO Rules Here

What is Excluded?
Excluded financial products include:
  • MySuper products;
  • Margin lending facilities;
  • Most ordinary shares;
  • Securities issued under an employee Share scheme; and
  • Other products prescribed by the Corporations Regulations.

Who/What May Be Included?

The DDO will apply to ‘issuers’ and ‘distributors’ of financial products that are available for acquisition by issue or regulated sale in Australia.


Issuers – Includes companies who are insurers, asset managers, banks, etc. Those who prepare PDS’ under Part 7.9 of the Corporations Act or prospectuses or disclosure documents under Part 6D.2 of the Corporations Act (s708 provides exceptions to the requirements).


Distributors: Companies who arrange for the issue of products, these can include fund managers that distribute products using a general advice model.


Under the Law, it includes:

Issuers can include persons who:

  • issue a financial product; and
  • must prepare a disclosure document under the Corporations Act.

(See s994B(1)(a) of the Corps Act. Meaning is extended by Reg 7.8A.05 – 7.8A.07)


For the purposes of the DDO, a distribution covered by the regime includes ‘retail product distribution conduct’, meaning:

    •   ‘dealing’ in a financial product;
    •   giving a PDS in relation to offering a financial product;
    •   providing a PDS; and
    •   providing financial product advice.

(Section 994A(1) of the Corporations Act)


The provision of personal financial product advice is ‘excluded conduct’ and not covered by the DDO.

Financial Products Under Corps Act

Financial products under the Corporations Act
In the case of financial products regulated by the Corporations Act are those financial products that are, or are likely to be, available for acquisition by retail clients by way of issue. It also applies to regulated sales of financial products: see s1023D(1)(a), 1023D(3)(a)and 1023Bof the Corporations Act. Such products include securities, interests in managed investment schemes, derivatives, insurance products, superannuation products and deposit-taking facilities.

Note 1: The above list is not an exhaustive list of financial products. The general definition of ‘financial product’ is contained in s763A of the Corporations Act, and s764A sets out a list of specific things that are financial products.


Note 2: ‘Regulated sale’ is defined as a sale that needs disclosure to investors under Pt 6D.2, a sale in relation to which a Product Disclosure Statement (PDS) must be given, or a sale made in circumstances prescribed in the Corporations Regulations: see s994A(1) of the Corporations Act.

Credit Products Under Credit Act

Credit products under the National Credit Act
In the case of the National Credit Act, the product intervention power (PIP) applies when a person is engaging, or is likely to engage, in credit activity in relation to a credit product or a proposed credit product.


Note: ‘Credit product’ is defined as a credit contract, mortgage, guarantee or consumer lease (see s301D of the National Credit Act).

Financial Products Under ASIC Act

The product intervention power also applies to financial products defined in the ASIC Act that are, or are likely to be, available for acquisition by retail clients by way of issue. The ASIC Act provides broad general consumer protections in relation to financial products and services through, for example, prohibitions on misleading or deceptive conduct and unconscionable conduct.


The remit of the ASIC Act is broader than the Corporations Act and the National Credit Act. For example, it includes some types of extended warranties, some types of short-term credit and certain buy-now-pay-later arrangements that are not covered by, or are exempt from, regulation under the Corporations Act and the National Credit Act.

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Design and Distribution Obligations

Issuers and Distributors of Financial Products are Affected
ASIC can and will intervene if businesses do not comply

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​​​​DDO - Issuers

Target Determination (TMD)
Reasonabel Steps
TMD - Review Triggers
TMD - Considerations
TMD-Example 1
TMD-Example 2
Target Determination (TMD)

How Can You Define a TMD?


(Click on each highlighted element on the image to see further details)


A target market could initially be determined by asking this question - Is it reasonable to conclude that, if the product were to be sold to a retail client in the target market, is this likely to be aligned with the likely objectives, financial situation and needs of the retail client?               

                                                                

Issuers will need to consider each of the likely objectives, financial situation and needs of consumers in the target market. A product that might be consistent with the likely objectives of consumers in the target market but might not be consistent with the likely financial situation of the target market, and vice versa.


Developing A Compliant TMD

The first design obligation requires an issuer to make a ‘target market determination’ for their product. There are a number of requirements that must be met for such a determination to be validly made. In particular, the target market determination must:

• be in writing

• describe the class of retail clients that comprise the target market for the product (the target market)

• specify any conditions and restrictions on retail product distribution conduct (the distribution conditions)

• specify events and circumstances that would reasonably suggest the determination is no longer appropriate (review triggers)

• specify maximum review periods (review periods)

• specify reporting periods for when complaints about the product should be provided from the distributor to the issuer

• specify kinds of information needed to promptly determine that a determination may no longer be appropriate, along with;

- which distributors should provide those kinds of information; and

- reporting periods for when that information should be provided by the distributors to the issuer        
Reasonabel Steps

ISSUERS - Taken Reasonable Steps

Issuers must take reasonable steps that will, or are reasonably likely to, result in distribution being consistent with the TMD (reasonable steps obligation). You must adopt a risk management approach and take steps that are reasonably likely to reduce the risk of the product being distributed in a way that is inconsistent with the product’s TMD. Going through each ASIC guidance steps it may indicate that  most products will not require difficult or laborious steps in order to be ‘reasonable’.  For example:


"risk" can be high if there are financial incentives for a specific distributor to make a sale.


"harm" it is important to asses if products are  limited to the financial cost of initial payment, or in the case of an insurance product, a potential high excess.


A "mitigating step" could include further controls on sales and/or trends, perhaps collecting further data on specific questions from a potential customer or follow-up contacts with customers after a sale.


TMD - Review Triggers

Review Triggers and Review Periods

A review trigger is an event or circumstance which would reasonably suggest that the determination is no longer appropriate, and as part of making the target market determination the issuer must:


• identify events and circumstances (‘review triggers’) that would reasonably suggest that the target market determination is no longer appropriate; and

• determine the maximum period between reviews of the target market determination (called the ‘review period’), which must be reasonable in the circumstances.


ASIC does not provide specific guidance on the time required to do a review but practice could suggest a timeframe of 6 to 3 months can be appropriate. The requirement on a product issuer to determine review triggers ensures that they review and remake a target market determination when events or circumstances suggest that it may no longer be appropriate. What may constitute a review trigger will vary from product to product depending on the nature of the product and the circumstances surrounding its issue, including the way in which it is distributed. Practical Examples of the broad range of possible review triggers include:

• an event or circumstance that would materially change a factor taken into account in making the target market determination for the product;
• whether the product is being distributed and purchased as envisaged by its target market determination; and
• the nature and extent of any feedback received from those who distribute or acquire the product.
  • a high level of complaints relating to a particular product. Note that complaints can be lag indicators and detriment may have already happened. Issuer could also look at lead indicators that can be developed to mitigate the risk  detriment or compensation that may need to be paid to customers due to the poor design or the mis-selling of a financial product.
  • a potential lead indicator for a bank deposit account can be a high level of inactive                                    accounts opened and for for an insurance product, it may be low levels of claims against premiums or for credit products disproportionate levels of early termination.
TMD - Considerations

Potential Changes to Company Operations, Practices and Third-Party Agreements 

In an effort to meet DDO obligation, regulated entities will need to asses and consider substantial changes to existing processes, data, systems and contractual documentation as they implement the obligations.


A product issuer can start defining a target market by assessing if their product as consistent with the objectives, financial situation and needs of a group or ‘class’ of customers. The issuer also needs to specify distribution conditions that will make it likely that consumers who acquire the product are in the target market. Both issuers and distributors must take ‘reasonable steps’ to ensure distribution is consistent with the TMD.


Opposite to providing personal advice, design and distribution obligations do not require product issuers to assess the suitability of products for individual consumers.

Consideration needs to be given to the likely objectives, financial situation and needs of a class of consumers.

TMD-Example 1
TMD-Example 2

Defining a Target Market for a Bundled Product

ASIC - RG2 74
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A Customer-Centric Framework

​​​DDO - Distributors

DDO Obligations
Reasonable Steps
Relevant Factors
DDO Obligations

Obligations for Distributors


(Click on each highlighted element on the image to see further details)


Distributors generally interact directly with the end consumer. A distributor can be an intermediary between the issuer of a financial product and the consumer, or the issuer itself, when the issuer deals directly with consumers.


Like issuers, distributors must take reasonable steps that will, or are reasonably likely to, result in distribution of a financial product being consistent with the TMD for that product


What are reasonable steps for distributors depends on the likelihood of distribution being inconsistent with the TMD, the potential harm that might arise from inconsistent distribution, and the steps that can be taken to mitigate these harms


In some cases, the reasonable steps obligation will require a distributor to collect or review data about consumers. This is not for the purpose of providing individualised advice, but rather to enable the distributor to assess whether a consumer, or group of consumers, is reasonably likely to be in the target market.


Distributors also have obligations to report certain information to issuers, including when there is a significant dealing that is not consistent with the TMD. Distributors must also keep records of distribution information

Reasonable Steps

Taking reasonable steps in relation to distribution

An issuer that distributes its products directly to consumers must comply with both the reasonable steps obligation

In the case of an IDPS platform operator must comply with:

    • the issuer’s reasonable steps obligation in relation to interests in the IDPS issued to consumers and 
    • the distributor’s reasonable steps obligation in relation to the underlying financial products offered on the platform
  • A distributor generally must not distribute a financial product unless a TMD has been made for it and the distribution of a product is consistent with the TMD. 
  • A distributor must have robust product governance arrangements in place to help ensure that it complies with its obligations, including the reasonable steps obligation
  • Like an issuer, a distributor must take into account all relevant factors in assessing what reasonable steps need to be taken in the circumstances, these factors include:
    (a) risk—the likelihood of the distribution being inconsistent with the TMD;
    (b) harm—the nature and degree of harm that might result from the financial product being issued otherwise than in accordance with the TMD; and
    (c) mitigation steps—steps that can be taken to eliminate or minimise the likelihood of the distribution being inconsistent with the TMD and the harm that might result
  • A distributor must comply with distribution conditions in the TMD for the product and any distribution agreement with the issuer.


Relevant Factors

ASIC Rules Codifed

DDO Accountability Model
DDO Data Standards
Standards Visualisation
DDO Accountability Model

DDO Accountability Models

(Click on each highlighted element on the image to see further details)


If your financial institution has been through accountability regimes like BEAR or the FAR legislation, you may be able to leverage current accountability methodologies. Nonetheless, if you have not been through any of these regimes, DDO demands a well-defined form of accountability structure in place. Below we provide a sample DDO accountability methodology model that can be adopted by your firm and may assist in breaking down each specific accountability required to deliver on DDO.


The RACI model clearly lays out roles and responsibilities for any activity or group of activities which will be relevant to the DDO implementation.


A RACI chart (RACI matrix) clarifies roles and responsibilities, making sure that nothing falls through the cracks.  RACI charts also prevent confusion by assigning clear ownership for tasks and decisions.A RACI template can easily accommodate larger DDO projects by inserting additional rows and columns. 


DDO Data Standards

FSC's Data Standard Definition Template for TMD's

Attributes and Elements of a Codified TMD for Specific Products as Defined by the FSC

(Under BSD 3-Clause License)

Standards Visualisation

FSC's Logical Definition for TMD's

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Technology and DDO
DDO Implementation
Potential Technical Solutions
Industry Costs & Estimates
DDO Implementation

Technology Using a Customer Centric Strategy

Financial services organisation in the context of customer-facing services.


Traditionally, many financial services firms follow a product-oriented, internally focused business strategy model. Their attention is based on a resource-based, cost-efficient creation of products and service which has been designed to target old mass markets with homogenous demands. But we all know that our modern digital markets and customer demands look entirely different now.                                                                      

In a new world order of expanding customer bargaining power, increasing customer requirements, fierce competition, and cost pressure measures, product-oriented, internally focused strategy model appear totally unsuitable. 



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Owing to the sharp refocus demanded by ASICs to establish product governance arrangements to address the new targeted and principles-based product design and distribution obligation regime, financial institutions should consider moving away from a cost-base, product‐centric model and towards a customer‐centric approach. Companies that focus on their customers can provide a positive customer experience through their entire journey. To accomplish this, companies may need to undergo a considerable shift in their firm’s structure, business processes, and culture

Potential Technical Solutions

Using Technology to Address DDO

If you have already started on the journey to become a client-centric organisation we can begin assessing some potential enabling technologies and online solutions that will help address implementation and full compliance with the DDO regime. First port of call would be to look at the technology and processes you currently have and asses if any component could either be duplicated,  re-used or leveraged as either an incremental or a complementary solution to also comply with  DDO.


For example, we examine if your firm has had to comply with any other governance, compliance or risk related comparable regulations before, these can be legislation as required by:                                   

  • NCCP - Credit licensing: Responsible lending conduct 
  • APRA - Member Outcome Obligations (RSE Licensees) 
  • AFCA - The Dispute Resolution Systems and Internal Dispute Resolution (IDR & EDR) Procedures
  • APRA - Banking Executive Accountability Regime (BEAR)
  • Financial Accountability Regimes (BEAR and FAR)
  • Mortgage Broker Best Interest Duty
  • Future of Financial Advice (FOFA) - Best Interests’ Duty and Related Obligations
  • Advice Fee Consent and Independence Disclosure
  •  General Insurance Code of Practice
  •  Consumer Data Right Rules (CDR) / Data Sharing Phase 1 & 2
  •  RCR The Financial Sector Reform – Protecting Consumers 

Or any overseas jurisdiction regulation that requires your international branch to comply with, these being:                                    

      • Markets in Financial Instruments Directive - MiFID II legislation - ESMA, Europe
      • Heightened Supervision for Complex Products, FINRA, USA
      • Retail Product Development and Governance — Structured Product review, FCA, UK
      • Senior Managers & Certification Regime - SMCR, FCA/PRA, UK


If your firm is complying with some of the above regimes, there is a good likelihood that underlying technology and processes can be augmented and potentially leveraged further. It is also worth noting that some large Australian vendors in financial markets have developed some components that address key areas of DDO compliance – keep an eye on our blogs as we identify and asses some of these key players in the market. 


If you feel that you still require to implement new systems and processes in order to satisfy ASIC’s obligation of effective product governance arrangement, we can recommend and implement some leading-edge automated technology and cloud-based collaborative /  authoring software as a service (SaaS).  These solutions are cost-effective and can be scalable enough to implement a solution that can forge connections while providing great customer experiences.


Contact Discidium here for an initial free consultation


Industry Costs & Estimates

Annual Compliance Costs for the Industry as a Whole to Amount to $94.7 million


Industry concerns about implementation costs could be dealt with by ensuring the obligation builds on good practice, is principles based and is applied on a scaled basis, allowing scope for firms to adapt their existing practices. Thus, the new obligation imposes minimal costs on firms with existing good practices. Some incremental costs for industry may include client categorisation, record keeping, updating documentation and staff training, as well as monitoring changes in the external environment.


The Government assumes that the new DDO Law option delivers benefits to industry, including strengthening internal risk management for product design, which may mitigate future problems, as well as signalling a higher level of customer focus. This approach also avoids new, more complex and interventionist regulation in the future, promoting efficiency in the financial system overall. 

Assuming that the new DDO Law option delivers benefits to industry, including strengthening internal risk management for product design, which may mitigate future problems, as well as signalling a higher level of customer focus. This approach also avoids new, more complex and interventionist regulation in the future, promoting efficiency in the financial system overall.


A regulatory costing has been prepared, consistent with the Government’s Regulatory Burden Measurement Framework. For product issuers and distributors, implementation and ongoing costs are associated with:
• developing policies and procedures to ensure that they are complying with the new requirements;

• changing product review and distribution standards; and

• communicating with other distributors and issuers as relevant.

The costs also include updating IT systems to ensure that existing systems are compliant with requirements and that they will be able to monitor products and customers on an ongoing basis.


It is estimated that the increase in annual compliance costs for the industry as a whole will amount to $94.7 million annual compliance costs for the industry as a whole will amount to $94.7 million

(Source: DDO Bill 2019 - EXPLANATORY MEMORANDUM)

Financial Products Under The DDO Law

Coverage
s994AA
s994B
PART 6D.2
PART 7.9
Coverage


   Financial Products as Defined by:

    • PART 6D.2
    • PART 7.9 


   Who is Covered?

    Issuers include persons who:

  • issue a financial product; and
  • must prepare a disclosure document
    under the Corporations Act.

    Distributors means regulated persons,  including:

  • AFS licensees;
  • authorised representatives;
  • credit licensees; and
  • credit representatives.

    s994AA

    (1) In this Part, financial product means each of the following:

    • (a) a financial product (within the meaning of this Chapter) (see section 761A);
    • (b) a financial product (within the meaning of Division 2 of Part 2 of the ASIC Act), other than a financial product covered by paragraph (a).

    Note: Whether a target market determination is required to be made in relation to financial products covered by this extended definition is determined under section 994B, including any regulations made for the purposes of paragraph 994B(3)(f).


    (2) In determining the meaning of a term used in a provision of this Part (other than this section), treat a reference in this Act to a financial product as being a reference to a financial product within the meaning of subsection (1) of this section.

    s994B

    Requirement to make a target market determination


    (1) Subject to subsection (3), a person must make a target market determination for a financial product if:

     (a) under Part 6D.2, the person is required to prepare a disclosure document for the product; or

     (b) under Part 7.9, the person is required to prepare a Product Disclosure Statement for the product; or

     (ba) the product is covered by paragraph 994AA(1)(b) (about the extended operation of this Part) and:

     (i) the person issues the product to another person as a retail client; or

    (ii) the person sells the product under a regulated sale; or

     (c) regulations made for the purpose of this paragraph require the person to make a target market determination for the product.

    (2) A person required by subsection (1) to make a target market determination for a financial product must do so before:

     (a) if paragraph (1)(a), (b) or (ba) applies—any person engages in retail product distribution conduct in relation to the product; or

     (b) if paragraph (1)(c) applies:

     (i) the time or event specified in regulations made for the purposes of that paragraph; or

     (ii) if there is no time or event so specified—any person engages in retail product distribution conduct in relation to the product.

    Note 1: Failure to comply with this subsection is an offence (see subsection 1311(1)).

    Note 2: This subsection is also a civil penalty provision (see section 1317E). For relief from liability to a civil penalty relating to this subsection, see section 1317S.

    (3) Subsections (1) and (2) do not apply to:

     (a) a MySuper product; or

     (b) a margin lending facility; or

     (c) a security that has been or will be issued under an employee share scheme; or

     (d) a fully paid ordinary share in a company or a foreign company (except a fully paid ordinary share covered by subsection (4)); or

     (e) a financial product issued, or offered for regulated sale, by an exempt body or an exempt public authority; or

     (f) a financial product of a kind prescribed by regulations made for the purposes of this paragraph.

    (4) Paragraph (3)(d) does not apply to a fully paid ordinary share in a company or a foreign company if:

     a) on the issue of the share, the company intended that the share be converted into a preference share within 12 months after the date of issue; or

    (b) the company:

    (i) carries on a business of investment in financial products, interests in land or other investments; and

    (ii) in the course of carrying on that business, invests funds subscribed, whether directly or indirectly, after an offer or invitation to the public (within the meaning of section 82) made on terms that the funds subscribed would be invested.

    Requirements for target market determinations

    (5) A target market determination for a financial product must:

     (a) be in writing; and

     (b) describe the class of retail clients that comprises the target market (within the ordinary meaning of the term) for the product; and

     (c) specify any conditions and restrictions on retail product distribution conduct in relation to the product (distribution conditions), other than a condition or restriction imposed by or under another provision of this Act; and

     (d) specify events and circumstances (review triggers) that would reasonably suggest that the determination is no longer appropriate; and

     (e) specify the maximum period from the start of the day the determination is made to the start of the day the first review of the determination under section 994C is to finish; and

     (f) specify the maximum period from the start of the day a review of the determination under section 994C is finished to the start of the day the next review of the determination is to finish; and

     (g) specify a reporting period for reporting information about the number of complaints about the product (see subsection 994F(4)); and

     (h) specify the kinds of information needed to enable the person who made the target market determination to identify promptly whether a review trigger for the determination, or another event or circumstance that would reasonably suggest that the determination is no longer appropriate, has occurred and, for each kind of information, specify:

    (i) the regulated person or regulated persons that, under subsection 994F(5), are required to report the information to the person who made the determination; and

     (ii) a reporting period for reporting the information under subsection 994F(5).

    • Note 1: For paragraph (c), an example of a distribution condition for a financial product is a restriction limiting the distribution of the product to specified methods of distribution.
    • Note 2: The requirements of this subsection also apply when a new target market determination is made as a result of a review under section 994C.

    (6) A period specified under paragraph (5)(e) or (f), and a reporting period specified under paragraph (5)(g) or subparagraph (5)(h)(ii), must be reasonable.

    (7) In determining what is reasonable for the purposes of subsection (6), regard must be had to:

     (a) the need to identify promptly whether a review trigger for the determination, or another event or circumstance that would reasonably suggest that the determination is no longer appropriate, has occurred; and

     (b) the likelihood, nature and extent of detriment to retail clients that may result if:

     (i) a review trigger for the determination, or another event or circumstance that would reasonably suggest that the target market determination is no longer appropriate, has occurred; and

     (ii) the target market determination is not promptly reviewed.

    (8) A target market determination for a financial product must be such that it would be reasonable to conclude that, if the product were to be issued, or sold in a regulated sale:

     (a) to a retail client in accordance with the distribution conditions—it would be likely that the retail client is in the target market; and

    (b) to a retail client in the target market—it would likely be consistent with the likely objectives, financial situation and needs of the retail client.

    Making target market determinations public

    (9) A person who makes a target market determination must ensure that the determination is available to the public free of charge.

    • Note 1: Contravention of this subsection is an offence (see subsection 1311(1)).
    • Note 2: This subsection is also a civil penalty provision (see section 1317E). For relief from liability to a civil penalty relating to this subsection, see section 1317S.
    • Note 3: This subsection applies to all target market determinations, including those that have ceased to apply.
    PART 6D.2

    ​PART 6D.2----DISCLOSURE TO INVESTORS ABOUT SECURITIES (OTHER THAN FOR CSF OFFERS)

     Division 1--Overview

        703B.          Part generally does not apply in relation to CSF offers  

        704.            When disclosure to investors is needed  

        705.            Types of disclosure document  

      Division 2--Offers that need disclosure to investors

         706.            Issue offers that need disclosure  

         707.            Sale offers that need disclosure  

         708.            Offers that do not need disclosure  

         708AA.        Rights issues that do not need disclosure  

         708A.          Sale offers that do not need disclosure  

      Division 3--Types of disclosure documents

         709.            Prospectuses, short-form prospectuses, profile statements and offer information statements  
             

      Division 4--Disclosure requirements

         710.            Prospectus content--general disclosure test  

         711.            Prospectus content--specific disclosures  

         712.            Prospectus content--short form prospectuses            

         713.            Special prospectus content rules for continuously quoted securities            

         713A.           Offer of simple corporate bonds            

         713B.            Simple corporate bonds--2-part simple corporate bondsprospectus            

         713C.            Simple corporate bonds--base prospectus            

         713D.            Simple corporate bonds--offer-specific prospectus            

         713E.            Simple corporate bonds--prospectus may refer to other material lodged with ASIC  

         714.            Contents of profile statement            

         715.            Contents of offer information statement            

         715A.            Presentation etc. of disclosure documents  

         716.            Disclosure document date and consents 

      Division 5--Procedure for offering securities

          717.            Overview of procedure for offering securities            

          718.            Lodging of disclosure document  

          719.            Lodging supplementary or replacement document--general  

          719A.            Lodging supplementary or replacement document--2-part simple corporate bondsprospectus            

           720.            Consents needed for lodgment  

           721.            Offer must be made in, or accompanied by, the disclosure document  

           722.       Application money to be held on trust  

           723.            Issuing or transferring the securities under a disclosure document  

          724.            Choices open to person making the offer if disclosure document condition not met or disclosure document defective  

          725.            Expiration of disclosure document 

    PART 7.9

    CHAPTER 7--Financial services and markets

       

      ​​PART 7.9----FINANCIAL PRODUCT DISCLOSURE AND OTHER PROVISIONS RELATING TO ISSUE, SALE AND PURCHASE OF FINANCIAL PRODUCTS

       

          Division 1--Preliminary

          1010A.      Part generally does not apply tosecurities      

          1010B.      Part does not apply tofinancial products not issued in the course of a business  

          1010BA. Part does not apply to contribution plans  

          1010C.      Special provisions about meaning of sale and offer  

          1010D.      General approach to offence provisions      

       

          Division 2--Product Disclosure Statements

          Subdivision A--Preliminary

       

          1011A.      Jurisdictional scope of Division  

          1011B.      Definitions      

          1011C.      Treatment of offers of options over financial products      

       

          Subdivision B--Requirement for a Product Disclosure Statement to be given

       1012A.      Obligation to give Product Disclosure Statement--personal advice recommending particular financial product      

          1012B.      Obligation to give Product Disclosure Statement--situations related to issue of financial products      

          1012C.      Obligation to give Product Disclosure Statement--offers related to sale of financial products      

          1012D.      Situations in which Product Disclosure Statement is not required  

          1012DAA.Rights issues for which Product Disclosure Statement is not required  

          1012DA. Product Disclosure Statement not required for sale amounting to indirect issue      

          1012E.      Small scale offerings of managed investment and other prescribed financial products (20 issues or sales in 12 months)  

          1012F.      Product Disclosure Statement for certain superannuation products may be provided later  

          1012G.      Product Disclosure Statement may sometimes be provided later  

          1012H.      Obligation to take reasonable steps to ensure that Product Disclosure Statement is given to person electing to be covered by group financial product      

          1012I.      Obligation to give employer a Product Disclosure Statement in relation to certain superannuation products and RSA products      

          1012IA. Treatment of arrangements under which a person can instruct another person to acquire a financial product      

          1012J.      Information must be up to date  

          1012K.      Anti-avoidance determinations  

       

             Subdivision C--Preparation and content of Product Disclosure Statements

          1013A.      Who must prepare Product Disclosure Statement      

          1013B.      Title of Product Disclosure Statement      

          1013C.      Product Disclosure Statement content requirements  

          1013D.      Product Disclosure Statement content--main requirements  

          1013DA. Information about ethical considerations etc.  

          1013E.      General obligation to include other information that might influence a decision to acquire      

          1013F.      General limitations on extent to which information is required to be included  

          1013FA. Information not required to be included in PDS for continuously quoted securities      

          1013G.      Product Disclosure Statement must be dated  

          1013GA. Extra requirements if Product Disclosure Statement relates to foreign passport fund products      

          1013H.      Requirements if Product Disclosure Statementstates or implies that financial productwill be able to be traded      

          1013I.      Extra requirements if Product Disclosure Statement relates to managed investment products that are ED securities      

          1013IA. Extra requirements if Product Disclosure Statement relates to foreign passport fund products that are ED securities      

          1013J.      Requirements if Statement has been lodged with ASIC  

          1013K.      Requirements relating to consents to certain statements      

          1013L.      Product Disclosure Statement may consist of 2 or more separate documents given at same time  

          1013M.      Combining a Product Disclosure Statement and a Financial Services Guide in a single document  

       

          Subdivision D--Supplementary Product Disclosure Statements

          1014A.      What a Supplementary Product Disclosure Statement is  

          1014B.      Title of Supplementary Product Disclosure Statement      

          1014C.      Form of Supplementary Product Disclosure Statement      

          1014D.      Effect of giving person a Supplementary Product Disclosure Statement      

          1014E.      Situation in which only a Supplementary Product Disclosure Statement need be given  

          1014F.      Application of other provisions in relation to Supplementary Product Disclosure Statements      

       

          Subdivision DA--Replacement Product Disclosure Statements

          1014G.      Application of this Subdivision--stapled securities      

          1014H.      What a Replacement Product Disclosure Statement is  

          1014J.      Consequences of lodging a Replacement Product Disclosure Statement      

          1014K.      Form, content and preparation of Replacement Product Disclosure Statements      

          1014L.      Giving, lodgment and notice of Replacement Product Disclosure Statements      

       

          Subdivision E--Other requirements relating to Product Disclosure Statements and Supplementary Product Disclosure Statements

          1015A.      Subdivision applies to Product Disclosure Statements and Supplementary Product Disclosure Statements      

          1015B.      Some Statements must be lodged with ASIC  

          1015C.      How a Statement is to be given  

          1015D.      Notice, retention and access requirements for Statement that does not need to be lodged  

          1015E.      Altering a Statement after its preparation and before giving it to a person      

       

          Subdivision F--Other rights and obligations related to Product Disclosure Statements

          1016A.      Provisions relating to use of application forms  

          1016B.      If Statement lodged with ASIC, financial product is not to be issued or sold before specified period  

          1016C.      Minimum subscription condition must be fulfilled before issue or sale      

          1016D.      Condition about ability to trade on a market must be fulfilled before issue or sale      

          1016E.      Choices open to person making the offer if disclosure condition not met or Product Disclosure Statement defective  

          1016F.      Remedies for person acquiring financial product under defective Product Disclosure Document  

       

          Division 3--Other disclosure obligations of the issuer of a financial product

          1017A.      Obligation to give additional information on request  

          1017B.      Ongoing disclosure of material changes and significant events  

          1017BA. Trustees of regulated superannuation funds--obligation to make product dashboard publicly available  

          1017BB. Trustees of registrable superannuation entities--obligation to make information relating to investment of assets publicly available  

          1017C.      Information for existing holders of superannuation products and RSA products      

          1017D.      Periodic statements for retail clients for financial products that have an investment component  

          1017DA. Trustees of superannuation entities--regulations may specify additional obligations to provide information  

          1017E.      Dealing with money received for financial product before the product is issued      

          1017F.      Confirming transactions      

          1017G.      Certain product issuers and regulated persons must meet appropriate dispute resolution requirements  

       

          Division 4--Advertising for financial products

          1018A.      Advertising or other promotional material for financial product must refer to Product Disclosure Statement      

          1018B.      Prohibition on advertising personal offers covered by section 1012E  

       

          Division 5--Cooling-off periods

          1019A.      Situations in which this Division applies  

          1019B.      Cooling-off period for return of financial product      

       

          Division 5A--Unsolicited offers to purchase financial products off-market

          1019C.      Definitions      

          1019D.      Offers to which this Division applies  

          1019E.      How offers are to be made  

          1019F.      Prohibition on inviting offers to sell  

          1019G.      Duration and withdrawal of offers  

          1019H.      Terms of offer cannot be varied  

          1019I.      Contents of offer document  

          1019J.      Obligation to update market value      

          1019K.      Rights if requirements of Division not complied with  

       

          Division 5B--Disclosure etc

          1020AA. Definitions      

          1020AB. Seller disclosure  

          1020AC. Licensee disclosure  

          1020AD. Public disclosure of information  

          1020AE. Licensee's obligation to ask seller about short sale      

          1020AF. Regulations  

       

          Division 5C--Information about CGS depository interests

          1020AG. Jurisdictional scope of Division  

          1020AH. Definitions      

          1020AI. Requirement to give information statements for CGS depository interest if recommending acquisition of interest  

          1020AJ. Information statement given must be up to date  

          1020AK. How an information statement is to be given  

          1020AL. Civil action for loss or damage  

       

          Division 6--Miscellaneous

          1020A.      Offers etc. relating to certain managed investment schemes not to be made in certain circumstances  

          1020BAA.Offers etc. relating to foreign passport funds not to be made in certain circumstances  

          1020B.      Prohibition of certain short sales of securities, managed investment products, foreign passport fund products and certain other financial products      

          1020D.      Part cannot be contracted out of  

          1020E.      Stop orders by ASIC  

          1020F.      Exemptions and modifications by ASIC  

          1020G.      Exemptions and modifications by regulations  

       

          Division 7--Enforcement

       Subdivision A--Offences

          1021A.      Overview  

          1021B.      Definitions      

          1021C.      Offence of failing to give etc. a disclosure document or statement      

          1021D.      Offence of preparer of defective disclosure document or statement giving the document or statement knowing it to be defective  

          1021E.      Preparer of defective disclosure document or statement giving the document or statement (whether or not known to be defective)  

          1021F.      Offence of regulated person (other than preparer) giving disclosure document or statement knowing it to be defective  

          1021FA. Paragraph 1012G(3)(a) obligation--offences relating to communication of information  

          1021FB. Paragraph 1012G(3)(a) obligation--offences relating to information provided by product issuer for communication by another person      

          1021G.      Financial services licensee failing to ensure authorised representative gives etc. disclosure documents or statements as required  

          1021H.      Offences if a Product Disclosure Statement (or Supplementary PDS) does not comply with certain requirements  

          1021I.      Offence of giving disclosure document or statement that has not been prepared by the appropriate person      

          1021J.      Offences if preparer etc. of disclosure document or statement becomes aware that it is defective  

          1021K.      Offence of unauthorised alteration of Product Disclosure Statement (or Supplementary PDS)  

          1021L.      Offences of giving, or failing to withdraw, consent to inclusion of defective statement      

          1021M.      Offences relating to keeping and providing copies of Product Disclosure Statements (or Supplementary PDSs)  

          1021N.      Offence of failing to provide additional information requested under section 1017A  

          1021NA. Offences relating to obligation to make product dashboard publicly available  

          1021NB. Offences relating to obligation to make superannuation investment information publicly available  

          1021O.      Offences of issuer or seller of financial product failing to pay money into an account as required  

          1021P.      Offences relating to offers to which Division 5A applies  

       

          Subdivision B--Civil liability

          1022A.      Definitions      

          1022B.      Civil action for loss or damage  

          1022C.      Additional powers of court to make orders

    ​Visualise DDO Obligations & PIP Amendments
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