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ASIC sets out product law expectations

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The Australian Securities and Investments Commission (ASIC) has set out its expectations for determining target markets for retail products and distributing them appropriately in a regulatory guide for new laws that aim to drive a consumer-centric approach.

The guide was released last week after further consultation this year on the product design and distribution obligations that take effect from October 5 next year.

ASIC says it has taken a principles-based approach to its guidance on the laws, which apply to insurance, banking and superannuation products.

“Issuers and distributors should be monitoring and reviewing their products in light of consumer outcomes and adjusting arrangements when necessary,” the regulator says.

“There is no one-size-fits-all approach that can be set out in guidance.”

Acting Chairman Karen Chester says the obligations are a “game changer” and should assist industry to deliver better consumer outcomes, while managing non-financial risks and avoiding costly remediation.

“The obligations require firms to set their own boundaries to suit their business, products and customers,” she said.

“If they stay within these boundaries this will mean less enforcement action from ASIC and the opportunity for deregulatory initiatives over time.”

Regulatory Guide 274 is available here.