The new Design and Distribution Obligations rules in the Australian financial services market came into effect on October 5, mandating product issuers and distributors to place consumers at the center of product and distribution.
The Australian Securities & Investments Commission (ASIC) first issued guidelines on the design and distribution obligations for financial products last December, giving enough time to the market players to properly integrate them into their business processes.
“The design and distribution obligations 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,” ASIC stated in its guidelines.
The new rules require financial product issuers to provide a target market determination for all the issued products to retail customers. Additionally, the regulator defined the target market as a class of consumers that are suitable for the products under some distribution conditions.
Apparently, these types of rules are already in place in the United Kingdom and Europe.
“An interesting difference between the two regimes is that ASIC’s regime requires the publication of a Target Market Determination (TMD) (which many brokers have been emailing out to their existing client base over the past week) whereas the FCA and ESMA regime does not require this document to be published,” explained Sophie Gerber, a Director at Sophie Grace and TRAction Fintech.
Brokers Defining Client Base
As the obligations are mandatory for all Australian financial services firms, Forex and CFDs brokers are aligning their services with the guidelines. But, interestingly the TMD documents issued by each broker are a bit different, as reviewed by Finance Magnates. The critical difference is in the definition of client base.
“This furthers the shift away from reliance on a 'disclosure regime' which has underpinned the major regulatory systems for financial services over recent decades, and shifts ASIC along the global theme of implementing a higher level of obligations on financial product issuers and distributors to have a consumer-centric approach to designing and distributing products,” Gerber added.
ASIC’s Focus on Retail Investments
ASIC, which regulates the Aussie financial markets, has brought about several obligatory rules in recent months to make the financial markets safe for retail investors. Most recently, it decided to ban the retail sale of unsolicited financial products to curb misconduct in the banking, superannuation and financial services industry.
Earlier, the Aussie regulator imposed heavy restrictions on the distribution and marketing of CFD products and temporarily banned the controversial binary options for retail traders.
The new Design and Distribution Obligations rules in the Australian financial services market came into effect on October 5, mandating product issuers and distributors to place consumers at the center of product and distribution.
The Australian Securities & Investments Commission (ASIC) first issued guidelines on the design and distribution obligations for financial products last December, giving enough time to the market players to properly integrate them into their business processes.
“The design and distribution obligations 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,” ASIC stated in its guidelines.
The new rules require financial product issuers to provide a target market determination for all the issued products to retail customers. Additionally, the regulator defined the target market as a class of consumers that are suitable for the products under some distribution conditions.
Apparently, these types of rules are already in place in the United Kingdom and Europe.
“An interesting difference between the two regimes is that ASIC’s regime requires the publication of a Target Market Determination (TMD) (which many brokers have been emailing out to their existing client base over the past week) whereas the FCA and ESMA regime does not require this document to be published,” explained Sophie Gerber, a Director at Sophie Grace and TRAction Fintech.
Brokers Defining Client Base
As the obligations are mandatory for all Australian financial services firms, Forex and CFDs brokers are aligning their services with the guidelines. But, interestingly the TMD documents issued by each broker are a bit different, as reviewed by Finance Magnates. The critical difference is in the definition of client base.
“This furthers the shift away from reliance on a 'disclosure regime' which has underpinned the major regulatory systems for financial services over recent decades, and shifts ASIC along the global theme of implementing a higher level of obligations on financial product issuers and distributors to have a consumer-centric approach to designing and distributing products,” Gerber added.
ASIC’s Focus on Retail Investments
ASIC, which regulates the Aussie financial markets, has brought about several obligatory rules in recent months to make the financial markets safe for retail investors. Most recently, it decided to ban the retail sale of unsolicited financial products to curb misconduct in the banking, superannuation and financial services industry.
Earlier, the Aussie regulator imposed heavy restrictions on the distribution and marketing of CFD products and temporarily banned the controversial binary options for retail traders.
Arnab is an electronics engineer-turned-financial editor. He entered the industry covering the cryptocurrency market for Finance Magnates and later expanded his reach to forex as well. He is passionate about the changing regulatory landscape on financial markets and keenly follows the disruptions in the industry with new-age technologies.
CFI Obtains Regulatory Approval for South African Operations
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
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Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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