ASIC has released updates to Regulatory Guide 274 Product design and distribution obligations (RG 274) to provide greater clarity around ASIC’s guidance on the appropriateness requirement for target market determinations (TMDs). ASIC says the changes to RG274 will not require product issuers to update their TMDs.
Notes that have been added include:
- to cover the inclusion of 31-day term deposits as a basic banking product for the purpose of the DDO regime.
- to clarify that giving a disclosure document or PDS in the course of providing personal advice is excluded conduct for the purpose of the DDO regime.
- To state that to satisfy the appropriateness requirements, it must be reasonable to conclude that:
(a) the product, including its key attributes, is likely to be consistent with the likely objectives, financial situation and needs of consumers in the target market; and
(b) the distribution conditions make it likely that the consumers who acquire the product will be in the target market.
An issuer must keep records of its decisions and reasons for its decisions in relation to the appropriateness requirements.
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Author: David Jacobson
Principal, Bright Corporate Law
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About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.
