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The Australian Securities and Investments Commission (ASICs
ASICs
The Australian Securities and Investments Commission (ASIC) is Australia’s primary regulator for businesses, markets, financial services and consumer credit. It is empowered under the Financial Services Acts to facilitate, regulate and enforce Australia’s financial laws. The Australian Securities Commission was established and is administered under the Australian Securities and Investments Act 2001. ASIC was initially the Australian Securities Commission based on the ASC Act 1989. Initially the
The Australian Securities and Investments Commission (ASIC) is Australia’s primary regulator for businesses, markets, financial services and consumer credit. It is empowered under the Financial Services Acts to facilitate, regulate and enforce Australia’s financial laws. The Australian Securities Commission was established and is administered under the Australian Securities and Investments Act 2001. ASIC was initially the Australian Securities Commission based on the ASC Act 1989. Initially the
) issued a notice on Wednesday, calling on issuers of investment products and ordering them to “up their game” around design and distribution obligations (DDOs).
This happened when the Australian regulator discovered target market gaps in the offerings of several issuers of investment products. The regulator pointed out that it issued 15 stop orders for overly broadly defined target markets, 21 stop orders for using inappropriate investor risk profiles, ten stop orders for inappropriate levels of portfolio allocation and 18 stop orders for improper investment timeframes or withdrawal features.
Earlier this year, ASIC even discontinued Interactive Brokers stock lending products to retail traders due to flaws in its Target Market Determination (TMD) and Product Disclosure Statement (PDS).
“Further examination of DDO is forthcoming,” ASIC Vice President Karen Chester said. “All issuers of investment products should read our report, assess their practices and address any gaps informed by our findings.”
“We will not hesitate to take further action, from stop orders to legal proceedings, especially when we see egregious failures. We have already initiated civil penalty proceedings for alleged violations of DDO against a distributor of an investment product and an issuer of a credit product.
Rules to protect the interests of retail investors
ASIC introduced DDO in October 2021, requiring product issuers and distributors to place consumers at the center of product and distribution. This requires the design and distribution of financial products with “a clear and contemporary consideration of the objectives, financial situation and needs of targeted consumers and retail investors”.
“The design and distribution obligations
Obligation
In finance, an obligation is a financial liability where the terms of a contract must be met. If an obligation between the parties fails, the defaulting party may be subject to legal action. In this scenario, the culprit will not only have to agree to pay the fixed amount to fulfill the contractual arrangement, but may also be responsible for covering all costs of legal proceedings. Current payments or unpaid debts of any kind are considered financial obligations, so if someone owes you
In finance, an obligation is a financial liability where the terms of a contract must be met. If an obligation between the parties fails, the defaulting party may be subject to legal action. In this scenario, the culprit will not only have to agree to pay the fixed amount to fulfill the contractual arrangement, but may also be responsible for covering all costs of legal proceedings. Current payments or unpaid debts of any kind are considered financial obligations, so if someone owes you
are game changers for consumers and retail investors. Businesses need to embrace a consumer-centric mindset throughout the lifecycle of a financial product,” added Chester. “DDO Interim Stop Orders have become a ‘go-to regulatory tool’ for ASIC to quickly disrupt and stem poor consumer outcomes.”
“It is disappointing to see DDO shortcomings across the board, and by both large and small product issuers… The fact that we have issued 26 stop loss orders on investment products in just nine months shows that issuers of products need to “up their game” – and now.”
The Australian Securities and Investments Commission (ASICs
ASICs
The Australian Securities and Investments Commission (ASIC) is Australia’s primary regulator for businesses, markets, financial services and consumer credit. It is empowered under the Financial Services Acts to facilitate, regulate and enforce Australia’s financial laws. The Australian Securities Commission was established and is administered under the Australian Securities and Investments Act 2001. ASIC was initially the Australian Securities Commission based on the ASC Act 1989. Initially the
The Australian Securities and Investments Commission (ASIC) is Australia’s primary regulator for businesses, markets, financial services and consumer credit. It is empowered under the Financial Services Acts to facilitate, regulate and enforce Australia’s financial laws. The Australian Securities Commission was established and is administered under the Australian Securities and Investments Act 2001. ASIC was initially the Australian Securities Commission based on the ASC Act 1989. Initially the
) issued a notice on Wednesday, calling on issuers of investment products and ordering them to “up their game” around design and distribution obligations (DDOs).
This happened when the Australian regulator discovered target market gaps in the offerings of several issuers of investment products. The regulator pointed out that it issued 15 stop orders for overly broadly defined target markets, 21 stop orders for using inappropriate investor risk profiles, ten stop orders for inappropriate levels of portfolio allocation and 18 stop orders for improper investment timeframes or withdrawal functionality.
Earlier this year, ASIC even discontinued Interactive Brokers stock lending products to retail traders due to flaws in its Target Market Determination (TMD) and Product Disclosure Statement (PDS).
“Further examination of DDO is forthcoming,” ASIC Vice President Karen Chester said. “All issuers of investment products should read our report, assess their practices and address any gaps informed by our findings.”
“We will not hesitate to take further action, from stop orders to legal proceedings, especially when we see egregious failures. We have already initiated civil penalty proceedings for alleged violations of DDO against a distributor of an investment product and an issuer of a credit product.
Rules to protect the interests of retail investors
ASIC introduced DDO in October 2021, requiring product issuers and distributors to place consumers at the center of product and distribution. This requires the design and distribution of financial products with “a clear and contemporary consideration of the objectives, financial situation and needs of targeted consumers and retail investors”.
“The design and distribution obligations
Obligation
In finance, an obligation is a financial liability where the terms of a contract must be met. If an obligation between the parties fails, the defaulting party may be subject to legal action. In this scenario, the culprit will not only have to agree to pay the fixed amount to fulfill the contractual arrangement, but may also be responsible for covering all costs of legal proceedings. Current payments or unpaid debts of any kind are considered financial obligations, so if someone owes you
In finance, an obligation is a financial liability where the terms of a contract must be met. If an obligation between the parties fails, the defaulting party may be subject to legal action. In this scenario, the culprit will not only have to agree to pay the fixed amount to fulfill the contractual arrangement, but may also be responsible for covering all costs of legal proceedings. Current payments or unpaid debts of any kind are considered financial obligations, so if someone owes you
are game changers for consumers and retail investors. Businesses need to embrace a consumer-centric mindset throughout the lifecycle of a financial product,” added Chester. “DDO Interim Stop Orders have become a ‘go-to regulatory tool’ for ASIC to quickly disrupt and stem poor consumer outcomes.”
“It is disappointing to see DDO shortcomings across the board, and by both large and small product issuers… The fact that we have issued 26 stop loss orders on investment products in just nine months shows that issuers of products need to “up their game” – and now.”
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