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Design & Distribution Obligations (DDO)

The Design and Distribution Obligations (DDO) regime is a mandatory government legislation that will have an affect on all issuers that offer and invest in retail financial products. This new ASIC requirement will impact investing with Centuria directly or indirectly via your investment platform.

We’re currently working through our obligations as an issuer, as well as how we’re going to work with the distributors of our products to meet these new requirements.

As we work through these new requirements, we’ll update the information on this page so stay tuned for more detail on our proposed approach.

Note Wholesale investments are not covered by this legislation.

What is DDO?

What is DDO?

By October 2021, the Product Design and Distribution Obligations (DDO) require the issuer of a financial product to determine that there is an appropriate target market for its product(s) and ensure that its products have key attributes which are likely to be consistent with the likely objectives, financial situations and needs of a class of consumers to whom the product is targeted.

DDO also sets out the ‘reasonable steps’ that must be taken for the distribution of a financial product by both the issuers and distributors of financial products to ensure that the product is distributed to investors who fall within the Target Market Determination (TMD).

What is a Target Market Determination (TMD)?

As a product issuer Centuria is required to make a target market determination (TMD) for a product. The TMD must be in writing and must clearly set out details relating to the target market which the financial product will be offered. The DDO requirements are intended to help consumers obtain appropriate financial products by requiring issuers and distributors to have a consumer-centric approach to the design and distribution of products.

Therefore it’s our responsibility to create a TMD for each of our products offered that:

  • Describes the Target Market: outlines the likely objectives and needs of customers the product has been designed for.
  • Establishes Distribution Conditions: details the conditions or restrictions on the sale of the product.
  • Establishes Reporting Requirements: sets out the relevant information that must be provided to us by distributors at our required frequency.

You can access readily available TMDs on the following TAB and familiarise yourself with these documents in advance of going live in October 2021.

TMD files

Each TMD will represent a specific product and will outline the target market, key product attributes that are relevant to the target market, distribution conditions and reporting requirements of distributors. We will monitor the TMDs on an ongoing basis and will make updates as required. The TMDs are presented using the template format for Investment Managers / Investment Bonds that have been developed by the industry through the Financial Services Council (FSC). Please access the Fund TMD you require as a PDF document that you can review and consider in respect of your client investment recommendations.

Reporting

Distributors of Centuria’s products are now required under the DDO Legislation to report certain information in respect of the distribution of the product. The reporting information requested  by Centuria is based on the data reporting format issued by the FSC for the purposes of complying with the DDO. This dealings register relates to reports by platforms and advisers to Centuria (under the DDO regime) relating to product transactions/dealings, including dealings that are outside the target market.

This complaints register relates to reports by platforms and advisers to Centuria (under the DDO regime) relating to product transactions/dealings, including dealings that are outside the target market.

Platforms and advisers that are ‘distributors’ of Centuria’s financial products are required to report quarterly to Centuria of all complaints. Reports are due within 10 business days following the end of each quarter (i.e. 31 March, 30 June etc) and are required to be emailed to ddo@centuria.com.au.

The reporting templates can be accessed below:

Reports can completed in Excel format and sent to ddo@centuria.com.au.

Alternatively, if you use a particular system solution to meet your DDO reporting obligations, please contact Centuria Distribution Team to discuss how this can be integrated into Centuria’s reporting processes or email ddo@centuria.com.au.

1. What are key obligations for Centuria as a product issuer?

Our key responsibilities as a product issuer are:

  • to create and maintain the TMD for all our products that are covered by DDO
  • to take reasonable steps to ensure our products are distributed in line with those TMDs.

2. What are distribution conditions?

Distribution conditions are conditions  as defined by the product issuer that it thinks will ensure of the sale of a product, put in place by the issuer, to ensure that the product is sold to customers in line with the TMD. Product distributors will need to adhere to the distribution conditions established in the TMD.

3. What is expected of you as a distributor of our products?

You’re expected to understand the requirements we establish in the TMDs for our products. This means you need to:

  • understand the target market defined in a TMD and take reasonable steps to ensure the product is distributed in accordance with the TMD
  • understand to the extent possible apply distribution conditions established in the TMD
  • provide information as specified in the TMD, at the required frequency and in the required form
  • keep accurate records of the reasonable steps taken and any information provided to us
  • report to us where you believe a significant dealing in the product which is inconsistent with the product’s TMD has occurred.
  • Financial Advisers should seek guidance from AFSL holder or your industry association on any additional ASIC requirements associated with DDO

4. Will there be any changes to our application process?

  • Centuria is currently working on some enhancements to both its online an paper based application forms to include the collection of additional information for DDO.
  • For advised clients this will only require confirmation that the client is making the investment in accordance with advice received by the adviser.
  • For direct, non-advised clients, this may involve some filtering questions at the end of the application process.

5. When will you have the TMD available?

Centuria Property Funds

To have a seamless investor experience, we are moving to online application experience once the DDO goes live on 5 October 2021. We have a final draft of the TMD for unlisted property funds, we anticipate that the final version of the TMD is going to be available in September when it will be available on our website. Please contact Lizzie Paton on +61 2 8923 8923 if you wish to obtain a copy of the TMD before final version is available.

Centuria Investment Bonds

The draft TMD for our investment bonds is currently being finalised in partnership with Friendly Societies Association and the Financial Services Council, once finalised it will be available on our website for your review.

6. Will there be a change in the application process?

The DDO legislation requires not only a TMD be issued but also for direct investors, (non-advised) they answer a number of questions to assist in determining if the product is suitable.

 

Next steps

The Centuria team is here to help to work with you through this new ASIC DDO mandatory requirement. We will update this information page as we get closer to the implementation date. Any question please contact your Distribution Manager or email:

Centuria Property Funds – contactus@centuria.com.au

Centuria LifeGoals Investment Bonds – enquiries@centuria.com.au.

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