Product design and distribution obligations
What are the design and distribution obligations?
The Australian Government introduced the Design and Distribution Obligations (DDO) legislation to help customers obtain financial products that are appropriate for their objectives, financial situation and needs. The legislation requires product issuers, such as G&C Mutual Bank, and distributors of financial products to have a customer-centric approach to the design and distribution of their products. As a customer owned bank, G&C Mutual Bank already has a customer-centric approach, and in accordance with the DDO provides a Target Market Determination (TMD) for each product covered by the obligations.
DDO applies to a broad range of retail financial products including (but not limited to) home loans, car and personal loans, savings and transaction accounts, and credit cards.
What is a Target Market Determination?
A Target Market Determination (TMD) is a document created by product issuers, such as G&C Mutual Bank, for each product that’s covered by the design and distribution obligations (DDO).
- the product and its key attributes,
- who the product is most suitable for (the target market),
- the likely objectives, financial situation and needs of the customers for whom the product has been designed,
- details of the distribution channels through which a product can be acquired,
- any conditions or restrictions on the sale of the product, and
- when the TMD may need to be reviewed.
Please note that a TMD does not provide financial advice. You should always refer to the terms and conditions and any supplementary document(s) when making a decision about a product.
Why must G&C Mutual Bank have TMDs?
From 5 October 2021, the Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Act 2019 requires product issuers, such as G&C Mutual Bank, to make TMDs available. While our members are already at the centre of everything we do, TMDs are required to ensure that our approach to financial product design is customer-centric.
G&C Mutual Bank does not offer its products through financial brokers.