Design and distribution obligations: Significant dealing notification requirements

Key points

  • Where a significant dealing outside of the target market occurs, issuers are required to notify ASIC with relevant information. This page explains how an issuer can notify ASIC of a significant dealing.
  • For all other types of notifications, including those related to other breaches of the design and distribution obligations, AFS and Australian credit licensees are required to submit reportable situations to us via the approved form available in the ASIC Regulatory Portal.

From 5 October 2021, new product design and distribution obligations came into force. These reforms require firms to design financial products to meet the needs of consumers and to distribute their products in a more targeted manner.

As part of these obligations, issuers must notify ASIC of a significant dealing (except excluded dealings) in a financial product that is not consistent with the product’s target market determination (TMD): see s994G of the Corporations Act. (On this page the term ‘issuer’ has the same meaning as in Regulatory Guide 274 Product design and distribution obligations (RG 274), being a person who is subject to the TMD requirements in s994B (including sellers in a regulated sale situation)).

Distributors must notify issuers when they identify a significant dealing that is not consistent with the TMD: see s994F(6).

The significant dealing notification requirement does not replace reportable situations obligations. A significant dealing does not necessarily equate to a breach of the law. See Breach reporting by AFS licensees and Changes to how AFS licensees and Australian credit licensees report breaches.

Frequently asked questions

What is a 'significant' dealing?

How do I notify ASIC of a significant dealing?

What information am I required to provide ASIC?

How do I provide an update to a significant dealing notification?

What is the ASIC Regulatory Portal?

Where do I go if I need help registering for or using the portal?

What is a 'significant' dealing?

A significant dealing is a dealing to clients outside of the TMD for a product. Whether a dealing is significant will be a matter for the issuer and/or distributor to determine in the particular circumstances.

RG 274 outlines factors that may be considered in determining whether a significant dealing exists, including:

  • proportion of consumers not in the target market
  • actual or potential harm to consumers, including amount of loss
  • nature and extent of inconsistency of distribution to the target market determination.

If you are not sure whether a dealing is significant, we encourage you to report the dealing to ASIC (if you are an issuer) or the issuer (if you are a distributor).

How do I notify ASIC of a significant dealing?

Issuers must notify ASIC in writing as soon as practicable, and in any case within 10 business days after becoming aware of a significant dealing. An online form is available in the ASIC Regulatory Portal. Until 31 January 2022 we will also accept notifications by email to significantdealing@asic.gov.au.

What information am I required to provide ASIC?

The notification of a significant dealing could include:

  • date(s) of the significant dealing
  • description of the significant dealing
  • why the dealing is significant
  • how the significant dealing was identified
  • details of entities involved in the significant dealing
  • what steps, if any, have been, or will be, taken in relation to the significant dealing

How do I provide an update to a significant dealing notification?

If an update to a significant dealing notification is required the online form, available in the ASIC Regulatory Portal, will contain a field which allow users to advise of the previous submission reference number.

What is the ASIC Regulatory Portal?

The ASIC Regulatory Portal is your central access to ASIC's growing suite of digital regulatory services.

Where do I go if I need help registering for or using the portal?

The ASIC Regulatory Portal help page has resources to help you get up to speed with using the portal. These include step-by-step user guides, FAQs and videos to help you – from registering your account to connecting your registration and inviting trusted representatives to act on your behalf.

More information

  • Regulatory Guide 274 Product design and distribution obligations (RG 274).

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Last updated: 13/12/2021 04:03