Why you need a systemised approach to Target Market Determinations

Introduced under the Design and Distribution Obligation regime, Target Market Determinations (TMDs) are a major change to the disclosure obligations in the financial services industry. With the looming deadline of October 5^th, it is time to consider how your organisation will approach them, if you haven’t already.

Similarly, to a PDS, the TMD has to be accurate and also in line with the PDS, with no margin for error. They must be carefully considered and written. While the FSC will be providing templates to guide organisations, the challenge comes when there are multiple TMDs to write. Some organisations might have a handful, some will have hundreds.

The risk of not having your TMDs ready on time is enormous – without a TMD, financial products will be unable to be sold. An action plan is the only way forward. This is where organisations really need to consider the time involved, risk mitigation and the need for carefully considered wording.

Sarah Penn, CEO and Founder of Mayflower Consulting said “You need to consider how much time you need to allocate for TMDs, as well as if additional resources (people and technology) are required. If you are looking into expanding your team to handle TMD management, it’s important to remember that the more people you get involved, the more hand-off points there are and therefore the greater the risk to your organisation.”

You need to consider how much time you need to allocate for TMDs, as well as if additional resources (people and technology) are required. If you are looking into expanding your team to handle TMD management, it’s important to remember that the more people you get involved, the more hand-off points there are and therefore the greater the risk to your organisation.

Sarah Penn

Founder and CEO - Mayflower Consulting

Technology solutions such as Objective Keystone can not only improve accuracy and free up time (around 50%), but can also deliver an audit trail which is essential for demonstrating compliance and good governance.

Here are some of the key features of Objective Keystone that will enable you to take control of the process, improve efficiency and decrease risk:

Single source of truth

Objective Keystone is a centralised system where version-controlled content can be updated, reviewed and verified and easy collaboration can take place.

Collaborative authoring

Whether you are working from home or the office or even on your commute, Objective Keystone gives you 24/7 access to your documents to review, edit and verify. By working within a single source of truth, you avoid the miscommunication that occurs when working multiple versions of the same document.

Audit trail

With documents such as TMD and PDSs, accuracy is essential. However, , mistakes do happen. Therefore, having an audit trail of who made the change and when is imperative. “Good governance requires evidence, such as an audit trail. If something does go wrong, you need evidence of how you got from A to B,” Sarah Penn explained.

Good governance requires evidence, such as an audit trail. If something does go wrong, you need evidence of how you got from A to B.

Sarah Penn

Founder and CEO - Mayflower Consulting

Automation

Inevitably, TMDs will need to be updated. In Objective Keystone, common content can be defined centrally, verified in isolation of a TMD update and maintained in the Smart Clause Bank. Changes made are instantly cascaded across all relevant documents.

Verification

To ensure that all changes to the TMD are approved before going public, Objective Keystone offers a verification feature. Any change enacted will result in a broken verification with an automatic watermark applied until it is re-verified, and this will be recorded in the audit trail.

TMDs might feel overwhelming but with solutions like Objective Keystone, they don’t have to be. Embracing technology will allow you to save time and focus on other areas of the business, knowing that you have a solid process and quality risk controls in place.

To learn more about how Objective Keystone can assist with TMDs contact us or download the infographic.