DDO regime up for simplification

The Design and Distribution Obligations (DDO) regime which occupied so much of the financial services regulatory agenda through 2018/20 is up for simplification.

The Australian Securities and Investments Commission (ASIC) has written to the Treasurer, Jim Chalmers, nominating the DDO as one of the areas worth exploring in terms of bolstering productivity and economic growth.

Chalmers put to the financial services regulators that they should look to prioritise measures that do not require law reform but ASIC raised DDO in the context of a being law reform idea which had been raised by its regulatory simplification group which canvasses the views of industry stakeholders.

The ASIC letter, signed by the regulator’s chair, Joe Longo, said the most he most promising areas for specific law reform are in relation to more substantially simplifying the reportable situations regime to reduce burden and improving substantial holding notices to make them less difficult to navigate.

“We are already in discussions with Treasury around potential changes to the reportable situations regime. We are doing more work on the issues around substantial shareholding notices and will engage with Treasury on this as appropriate,” Longo’s letter said.

“Other law reform ideas that have been raised by the simplification group include reforms to the design and distribution obligations, product disclosure requirements, and simplification of the liability regime in the Corporations Act.”

The Treasury began canvassing the DDO regime back in 2016 under the former Turnbull Liberal Government and then Minister for Revenue and Financial Services, Kelly O’Dwyer.

It said the introduction of the regime was part of its response to the 2015 Financial System Inquiry.

In the end, the DDO regime drew heavily on the experience in the United Kingdom.