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ARTICLE · 23 NOVEMBER 2024

Design and Distribution Obligations for Distributors

Sophie Grace Pty Ltd
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ASIC has explicitly called on AFS licensees to review their distribution practices in Report 795.

AustraliaReal Estate and Construction
Chloe Yoo
Chloe Yoo
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ASIC has taken action against Australian Financial Services ("AFS") licensees who failed to comply with the Design and Distribution Obligations ("DDO"). ASIC has explicitly called on AFS licensees to review their distribution practices in Report 795 Design and distribution obligations: Compliance with the reasonable steps obligation.

AFS licensees who are distributors might wonder if this is relevant, as most of the action taken by ASIC was in relation to issuers and distributors are not responsible for setting the distribution conditions outlined in the Target Market Determination ("TMD"). While this may be true, the Corporations and ASIC Regulatory Guide 274 ("RG 274") outline that as a distributor, you also have obligations under the DDO.

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