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ASIC releases RG 274 - "Product Design and Distribution Obligations"

The long-awaited RG seeks to ensure that consumers obtain appropriate financial products by imposing a series of design and distribution obligations on financial product issuers and distributors.


In December last year, ASIC published the long-awaited Regulatory Guide "RG 274 - Product design and distribution obligations". The RG's stated objectives are:

  • to help consumers obtain appropriate financial products;

  • to reduce poor product development or distribution practices which result in adverse consumer outcomes.

  • to prevent consumer detriment.

The RG gives effect to these aims by imposing a series of design and distribution obligations (DDO) on issuers and distributors of financial products.


These DDO obligations include the following:


Financial product issuers


Financial product issuers must:

  • prepare a Target Market Determination ("TMD");

  • make the TMD publicly available;

  • take reasonable steps to ensure that distribution of the product is consistent with its TMD;

  • review the TMD to ensure it remains appropriate;

  • notify ASIC of "significant dealings";

  • keep records.


Financial product issuers


Financial product distributors must:

  • not distribute unless a TMD has been made;

  • take reasonable steps to ensure that distribution is consistent with the most recent TMD;

  • notify the issuers of "significant dealings";

  • keep records.


The Regulatory Guide (and related legislative instruments) can be accessed here.




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