What are the Design and Distribution Obligations?
Under the Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Act 2019, the new Design and Distribution Obligations (DDO) come into effect on 5 October 2021. The laws require all product issuers to develop Target Market Determinations (TMDs) for the products they issue to retail clients.
DDO requires issuers and distributors of financial products to have a consumer-centric approach to the design and distribution of their products, with the aim of helping consumers to obtain financial products that are appropriate for their objectives, financial situation and needs.
The obligations apply to a broad number of financial products including (but not limited to) home loans, credit cards, asset finance, wrap platforms, managed funds and bank accounts.
What is a Target Market Determination (TMD)?
As a product issuer we are required to create a TMD for each of our Funds.
A Target Market Determination is a document which describes who the Fund is appropriate for (target market), and any conditions around how the Fund can be distributed to retail customers. It also describes the events or circumstances where we may need to review the Target Market Determination for a Fund.
PM Capital has adopted (and licensed) the TMD template developed by the Financial Services Council (FSC).
Target Market Determinations for PM Capital Funds
Please see the Target Market Determinations for the Funds issued by PM Capital.
Key obligations for:
a product issuer
Our key responsibilities as a product issuer are:
a product distributor
The key obligations for product distributors are:
Distributor reporting requirements
If practicable, distributors should adopt the FSC data standards for reports to PM Capital.
Reports should be emailed to: firstname.lastname@example.org
Frequently asked questions
What are distribution conditions?
Distribution conditions are conditions or restrictions on the sale of a product, put in place by PM Capital, to ensure that the Fund is sold to retail investors in line with the TMD. Product distributors will need to adhere to the distribution conditions established in the TMD (if any).
If you are a distributor of our product/s, what is expected of you?
You are expected to understand the requirements we establish in the TMDs for our Funds. This means you need to:
- understand the target market defined in a TMD and take reasonable steps to ensure the Fund is distributed in accordance with the TMD
- understand and adhere to any distribution conditions (if any) established in the TMD
- provide information as specified in the TMD, at the required frequency and in the required form
- keep accurate records of the reasonable steps taken and any information provided to us
- report to us where you believe a significant dealing in the product which is inconsistent with the Funds’ TMD has occurred.