ASIC's latest round of enforcement action under the Design
and Distribution Obligations (DDO) regime confirms product issuers
and distributors need to focus on getting their DDO systems and
processes right.
This week
ASIC issued stop orders against the responsible entities of two
major property funds, Australian Residential Property Fund –
ResiFund and the Private Property Trust No. 20 – Fawkner
Property, based on deficiencies in the funds' target market
determinations (TMDs).
WHAT DOES IT MEAN FOR MANAGED FUNDS?
In the lead up to the one-year anniversary of the introduction
of DDO, ASIC is on the record as saying it is stepping up
surveillance in this area, including in the managed funds sector.
Under DDO, product issuers are required to define target markets
for their products, having regard to the risks and features of
their products. For property funds, this requires issuers to be
honest in their assessment of the product's features and the
type of
