ASIC proposes 5-year DDO regime extension

Mike Taylor

Managing Editor/Publisher, Financial Newswire

16 August 2023

The Australian Securities and Investments Commission (ASIC) is proposing to extend the Design and Distribution Obligations (DDO) regime for a further five years, pending possible changes recommended by the Australian Law Reform Commission (ALRC).

The regulator announced yesterday it was inviting industry feedback on extending the regime with submissions due to close on 25 August.

ASIC noted that the legislative instrument underpinning the DDO regime was initially made for a period of two years and implements measures announced by Treasury including relief for distributors from the obligation to report to product issuers if they received nil complaints during a reporting period.

“ASIC intends to extend the operation of the instrument to retain certainty for industry ahead of any law reform,” the regulator’s announcement said.

“ASIC assessed that ASIC Instrument 2021/784, is operating effectively and efficiently, and continues to form a necessary and useful part of the legislative framework.

The only changes proposed are to:

• extend the expiry of the instrument until the start of 5 October 2028; and
• to remove an exemption for cashless welfare arrangements that is no longer necessary following the making of the Corporations Amendment (Design and Distribution Obligations – Income Management Regimes) Regulations 2023.