Treasury: Amendments to the design and distribution obligations

The Government intends to make a number of amendments. The proposed changes will seek to:

• Clarify that margin lending to corporates is exempt from DDO obligations, consistent with the intention that all margin lending is to be exempt from DDO.
• Clarify employees of licensees are not subject to their own separate set of DDO obligations – this was not an intended consequence of the regime.
• Ensure 31-day term deposits fall within the DDO regime which is consistent with Government’s intention to capture all basic deposit products.
• Provide consistency in the application of retail and wholesale investor definitions across the Corporations Act by ensuring it extends to the DDO regime.
• Exempt foreign cash settled immediately from the DDO regime, as the risk for consumers is relatively low.
• Exempt non-cash-payment facilities (NCPFs) from the DDO regime except for certain facilities, specifically credit and debit card facilities and stored value facilities – broadly NCPFs are not standalone services and provide a facility for consumers to make non-cash payments, posing lesser risk to them.

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