28 July 2022 - ASIC’s first DDO stop orders to prevent offer of financial products to consumers

ASIC has placed interim stop orders on three financial firms in response to deficiencies in the target market determination (TMD) for their products. These actions are ASIC’s first use of the stop order powers under the design and distribution obligations (DDOs), which took effect on 5 October 2021.

‘The design and distribution obligations were created to deliver better consumer outcomes,’ ASIC Deputy Chair Karen Chester said. ‘Under the law, firms must embed a consumer-centric approach. They need to design financial products that meet the needs of consumers in their intended target market, and distribute those products in a targeted way. Where firms are not doing the right thing and there is potential for consumer harm, ASIC can now take quick action to disrupt poor conduct and prevent harm,’ Ms Chester said.