Design and Distribution Obligations
The Target Market Determination for the Vertium Equity Income Fund is available here.
What are the Design and Distribution Obligations (DDO)?
ASIC Regulatory Guide 274 (RG 274) requires Issuers and Distributors of financial products to take steps to ensure that retail clients are offered products that are likely to be consistent with their likely objectives, financial situation and needs. The DDO regime is designed to provide a framework for all retail products (funds) to be more focused on client outcomes throughout the design and distribution process.
What is a Target Market Determination (TMD)?
A TMD is a document which describes who a fund is appropriate for (target market), and any conditions around how a fund can be distributed to retail customers. It also describes the events or circumstances where a Responsible Entity, such as Copia Investment Partners may need to review the TMD for a fund.
The Responsible Entity will also ensure reasonable steps are taken to ensure on an ongoing basis that product distribution is consistent with the target market determination of funds.
For more information about RG 274 see here: RG 274 Product design and distribution obligations | ASIC – Australian Securities and Investments Commission
Copia is required to take reasonable steps to retail product distribution conduct is consistent with a product’s TMD (s.994E(5)). This means that we need to make the TMDs available to financial planners and platforms and they, in fulfilling their best interests duty to their clients, only recommend products to clients who are deemed suitable for a product based on the TMD.
We would like financial planners and platforms to provide us with a separate, annual (or more frequent), assurance that:
they have access to our current TMDs
they have read and understood the TMDs
in providing financial product advice to clients they have considered their suitability to invest in the products given the TMDs or
have otherwise made the TMDs available to their clients.
Furthermore, financial planners and platforms are required to report complaints and dealings concerning Copia products. These reports should be in the format of the FSC Complaints Reporting Template and DDO Dealings Reporting Template (https://www.fsc.org.au/resources/target-market-determination-templates). Completed reports are to be sent by email: firstname.lastname@example.org