New reforms commencing tomorrow such as design and distribution obligations (DDO) laws will increase “significantly” the red tape burden on the industry, the Financial Services Council (FSC) says.

FSC says the DDO regime should improve consumer outcomes since it requires financial services businesses to determine which type of customers are in the target market for the products they issue, and work together so that sales are directed towards customers in that target market.

It is, however, concerned about the impact on the industry when the DDO laws and other measures start.

“The red tape burden from this raft of reforms is significant and can add to the cost of delivering products and services,” FSC CEO Sally Loane said.

“We look forward to continuing to work with Government and [the Australian Securities and Investments Commission] on ways to improve consumer benefits and reduce red tape.”

Ms Loane says FSC is pleased that the corporate regulator has signalled it will take a “reasonable approach” to the start of the regulations.

It should assist businesses as they adapt to the new regulatory landscape, she says.