The Federal Government will make some last-minute amendments to design and distribution obligations (DDO), due to come into effect in October, after potential unintended consequences and issues were pointed out as financial services firms prepared for the new laws.

The changes will clarify that licensee employees are not subject to their own separate set of DDO obligations and provide consistency in the application of retail and wholesale investor definitions across the Corporations Act by ensuring it extends to the DDO regime, Treasury says.

Other changes include exemptions for margin lending to corporates and ensuring 31-day term deposits fall with the regime, consistent with the Government’s intention to capture all basic deposit products.

The new laws had been expected to take effect in April this year, but the start date was delayed to October 5 so industry participants could focus on other priorities amid the COVID-19 pandemic. The legislation was passed by Federal Parliament in April 2019.

Treasury says the planned changes are in response to feedback received from stakeholders, as the industry works towards implementing the requirements ahead of the start date.

“These amendments are necessary to clarify the law, to ensure a consistent application of the law, and that the regime remains fit-for-purpose,” it says.

Ahead of the legislative changes being made, the Australian Securities and Investments Commission will implement temporary measures, after targeted consultation.

Treasury says this will allow the Government time to make the changes permanent while also easing unnecessary burdens on industry.