The Australian Securities and Investments Commission (ASIC) is seeking industry feedback on a proposal to extend the operating period of the 2021 / 784 tool for ASIC Corporation (Design and Distribution Obligations Interim Measure) for another five years.。

The instrument is initially for two years and implements the measures announced by the Ministry of Finance。These include exempting distributors from the obligation to report to the product issuer if they do not receive any complaints during the reporting period。

ASIC intends to expand the operation of the tool in order to preserve certainty for the industry before any legal reform.。

The design and distribution obligation (DDO) requires companies to design financial products to meet the needs of consumers and distribute their products in a more targeted manner。Following the recommendations of the Financial System Survey, Parliament passed the obligations in 2019 and required businesses to comply from 5 October 2021.。

Prior to the DDO launch, Treasury received feedback from industry stakeholders on implementation requirements.。They announced that the government intends to make some changes based on industry feedback to achieve the expected operation of these reforms.。ASIC develops tools to implement government policy intentions during the transition period before legislative changes。

ASIC Instrument 2021 / 784 is operating effectively and efficiently and continues to form a necessary and useful part of the legislative framework.。

The only changes proposed are:

• Extend the validity of the tool to October 5, 2028
  Removal of the exemption from cashless benefit arrangements, which is no longer relevant after the enactment of the Companies Amendment (Design and Distribution Obligations - Income Management System) Regulations 2023

These modifications should not materially affect the operation of the financial instrument。

ASIC is seeking feedback and amendments to the proposal。