The Design and Distribution Obligations (DDO) regulation is coming.
The DDO regulation comes into effect on 5 October 2021 and impacts all facets of a financial product's lifecycle. So what does this mean for a fund's marketing team?
Fundamentals of the Design and Distribution Obligations (DDO) regulation
The intention of this regulation is to put the end-client at the heart of a product's design and distribution by introducing targeted, principles-based design and distribution obligations across the entire lifecycle of a financial product.
Products in Scope
All products that require a Product Disclosure Statement (PDS), as well as products (and specifically securities) that require disclosure to investors.
Target Market Determinations (TMD)
Product issuers must make a Target Market Determination (TMD) publicly available for each financial product.
The objective is for issuers to design products for a specific target market, disclose that product's distribution channels, and help distribution partners identify who the product is aimed at by means of a TMD document.
What this means for the fund's marketing team
For any product(s) available to retail investors, the DDO regulation states that all marketing materials need to reference information about the intended target market OR refer to the TMD and explain where the document can be found
- similar to how marketing materials currently reference and encourage the consumer to read the Product Disclosure Statement (PDS).
All marketing material will need to be updated and made publicly available by
5 October 2021.