Design and Distribution Obligations

The design and distribution obligations (DDO) are intended to help consumers obtain appropriate financial products by requiring issuers and distributors to apply a consumer-centric approach to the design and distribution of their financial products. As an issuer of funds to retail investors, a number of Pendal funds are subject to DDO requirements, including the requirement to issue a Target Market Determinations (TMD) for each of those funds.

Below are the TMDs of the Pendal funds which set out who the fund is appropriate for, and any restrictions relating to the sale and distribution of the fund.

DDO FAQ

Target Market Determinations (TMDs)

Reporting requirements for distributors

The following section is for distributors of Pendal funds and sets out Pendal’s expected reporting requirements. Distributors include AFS licensees or authorised representatives who conduct retail product distribution or provide financial product advice.

Reporting requirement	Reporting period	Applicable distributors
Complaints relating to the product design, product availability and distribution. The distributor should provide all the content of the complaint, having regard to privacy.	As soon as practicable but no later than 10 business days after the end of calendar quarter.	All distributors who have received a complaint in the relevant quarter
Significant dealing outside of the target market.	As soon as practicable but no later than 10 business days after distributor becomes aware of the significant dealing.	All distributors
To the extent a distributor is aware, dealings outside the target market, including reason why the acquisition is outside of target market, and whether the acquisition occurred under personal advice.	As soon as practicable but no later than 10 business days after the end of calendar quarter.	All distributors

Please send all DDO reporting to DDO@pendalgroup.com.   You can also contact your Pendal Sales Representative.

 

Significant dealings guidance

This guidance applies to all TMDs issued by Pendal on this website.

Pendal will rely on notifications of significant dealings from its distributors to monitor and review its funds, TMDs, distribution strategies, and to meet its obligation to report significant dealings to ASIC.

Dealings outside Pendal’s TMDs may be significant because :

• they represent a material proportion of the overall distribution conduct carried out by the distributor in relation to a Pendal fund, or
• they constitute an individual transaction which has resulted in, or will or is likely to result in, significant detriment to the consumer (or class of consumer).

In each case, a distributor should have regard to:

• the nature and risk profile of the fund (which may be indicated by the fund’s risk rating or withdrawal timeframes),
• the actual or potential harm to a consumer (which may be indicated by the value of the consumer’s investment, their intended use of the fund or their ability to bear loss), and
• the nature and extent of the inconsistency of distribution with the TMD (which may be indicated by the number of red or amber ratings attributed to the consumer).

Objectively, a distributor may consider a dealing (or group of dealings) outside the TMD to be significant if:

• it constitutes more than half of the distributor’s total retail fund distribution conduct in relation to the fund over the reporting period,
• the consumer’s intended use of the fund is Solution / Standalone (as defined in the relevant TMD), or
• the consumer’s intended use of the fund is Core Component (as defined in the relevant TMD) and the consumer’s risk (ability to bear loss) and return profile is Low.