Update on the Design and Distribution Obligations (DDO) regime



The Design and Distribution Obligations (DDO) regime was initially scheduled to commence on 5 April 2021, after the Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Act 2019 was passed in April 2019. However, commencement of the regime was deferred to 5 October 2021 in light of the economic impact of COVID-19, to allow industry participants to focus on immediate priorities and the needs of their customers.

Leading up to the October 2021 commencement, Treasury has received feedback from industry stakeholders as they work towards implementing the requirements prior to the regime’s commencement. In light of this feedback, the Government intends to make a number of amendments to achieve its intended operation of these reforms. For many of these amendments, the Australian Securities and Investments Commission (ASIC) will provide temporary relief that gives effect to the Government’s policy intention in the interim period before the legislative changes are made. The proposed temporary amendments are set out in the attached policy statement on DDO.

Please note the attached policy statement was updated on 14 September to reflect the Government’s most recent decisions on further amendments that ASIC will also address through interim relief before being permanently enacted by Government.

Treasury will consult on these changes with stakeholders in due course, as well as other amendments, including:

  • making clear that more streamlined obligations (i.e. only record keeping and notification obligations) for distributors only apply where the intermediary has a duty to act in the consumer’s best interests, such as where personal advice is provided under the Corporations Act, or where mortgage brokers engage in similar conduct;
  • ensuring that the DDO regime applies to consumer leases; and
  • considering the operation of the complaints reporting regime to ensure that it is fit-for-purpose, following immediate action to remove the requirement for distributors to report nil complaints and nil information to issuers.

Enquiries can be directed to DDOteam@treasury.gov.au