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.

If you found this article helpful, then subscribe to our news emails to keep up to date and look at our video courses for in-depth training. Use the search box at the top right of this page or the categories list on the right hand side of this page to check for other articles on the same or related matters.