3 May 2023 - ASIC calls on investment product issuers to ‘lift their game’ on design and distribution obligations

ASIC calls on investment product issuers to ‘lift their game’ after an initial review found significant room for improvement in how they meet their design and distribution obligations (DDO).

The DDO, now into its second year, marks a significant shift to outcomes-based regulation. Ultimately, it requires financial products to be designed and distributed with clear and contemporary consideration of the objectives, financial situation and needs of the consumers and retail investors being targeted.

‘The design and distribution obligations are a ‘game changer’ for consumers and retail investors. Companies need to take a consumer-centric mindset across a financial product’s lifecycle. The DDO interim stop orders have become a ‘go-to regulatory tool’ for ASIC to quickly disrupt and stem poor consumer outcomes,’ ASIC Deputy Chair Karen Chester stated.