On 5 October 2021, the Design and Distribution Obligations (“DDO”) will come into force for all issuers and distributors of financial products that are covered by DDO. YUNS Finance Pty Ltd (“YUNS”) is covered and operates under the regime of DDO. Accordingly, we are in the process of updating our DDO policy to reflect compliance and regulatory requirements. This will be an ongoing process and YUNS will continue to ensure its compliance and update any further information required.
DDO is limited to any loan where credit is provided wholly or predominantly for personal, domestics or household purposes, or to purchase, renovate or improve residential property for investment purposes, or to refinance credit previously provided for this purpose, including asset finance to consumers but excluding any business purpose loans.
Design and Distribution Obligations
DDO requires issuers and distributors of financial products to have a consumer-centric approach to the design and distribution of their products, with the aim of helping consumers to obtain financial products that are appropriate for their objectives, financial situation and needs.
The obligations under DDO applies to YUNS due to the following:
· DDO will apply to “mortgage brokers”, a term which is now defined under the National Consumer Credit Protection Act 2009 (Cth) (Credit Act) as:
1. A credit licensee or credit representative who carries on a business of providing credit assistance in relation to credit contracts offered by more than one credit provider that are secured by mortgages over residential property,
2. And does not perform the obligations or exercise the rights of a credit provider in relation to the majority of those credit contracts.
Key Points of Design and Distribution Obligations
· YUNS is identified as product distributor under the ASIC Regulatory Guide 274.
Target Market Determination (TMD)
YUNS must adhere to Target Market Determination (TMD) of products issuer, including an outline of the expected financing objectives, financial circumstances and needs of customers of the products being offered.
We will also determine and advise on the conditions and/or restrictions of the products that we offer.
Reporting requirements will be established, including setting out relevant information, reporting frequency, reporting metrics, etc. At a minimum, we will regularly report the number of complaints it receives about the issuer’s product to the issuer, as well as reporting any significant dealings in the product that are inconsistent with the TMD.
Our Key Obligations
The key obligations for product distributors are:
· ensuring there’s a TMD in place for any products covered by DDO
· understanding and following distribution conditions and reporting requirements set by the product issuer in the relevant TMD
· taking reasonable steps to ensure the product is distributed in line with TMD
· keeping records of distribution information
· reporting information to the issuer as required by TMD.
Expectation on Product Distributor
YUNS is expected to understand the requirements established in the TMDs for the products we distribute. We are required to:
· understand the target market defined in a TMD and take reasonable steps to ensure the product is distributed in accordance with TMD
· understand and adhere to any distribution conditions established in TMD
· provide information as specified in TMD, at the required time and in the required form
· keep accurate records of the reasonable steps taken and any information provided
report when we believe a significant dealing in the product is inconsistent with the product’s TMD has occurred.
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Australian Credit Licence 493767