Why you shouldn’t follow the pack when it comes to TMDs

It’s not said out loud very often, but there’s safety in numbers when it comes to financial services. If other companies like yours are doing things similarly to yours then you’re probably going to be OK. It’s not great for innovation, but it works for risk management, and we all know how important that is right now!

However, when it comes to the Design and Distribution Obligations, and more specifically the Target Market Determination (TMD) that issuers are required to produce for every product, following the pack is exactly the wrong approach.

ASIC have been clear that they expect issuers to put considerable time and effort into each TMD, to ensure that it really does give distributors a clear picture of exactly who the product is for and how it should be sold. While it’s super helpful that the Financial Services Council are putting together templates (and they are really good by the way, an immense amount of time and effort has gone into making them really useful documents), they are still just templates.

And unlike fee disclosure, where you simply drop your numbers into the prescribed wording, even the most fulsome TMD templates still require considerable time, effort and brain power to be turned into workable TMDs.

Because not only do TMDs have to be well written and clearly describe the product and the intended distribution, they have to be workable. Which means taking the time required to run them past distributors to make sure that the distribution conditions can be met and complied with, as well as tracked and reported on.

Given that this is the first time this sort of requirement has existed, there are bound to be some teething issues, and no-one wants to be sorting this stuff out too close to the deadline. Did I mention the deadline? October 5, 2021. Which is now racing towards us.

Which all leads me to say, it is simply imperative to get started early, and make sure that whatever you do, it’s backed up with rigorous process and fit-for-purpose technology.

Which all leads me to say, it is simply imperative to get started early, and make sure that whatever you do, it’s backed up with rigorous process and fit-for-purpose technology.

Sarah Penn

Founder and CEO - Mayflower Consulting

So let’s talk about technology. I don’t know about you, but I’ve been involved with way too many tech builds and installations where the promised efficiency gains were somehow the opposite of what actually happened! Which is why I am very choosy about the technology that I recommend to my clients. If it doesn’t make life easier, then really, what is the point?

To my mind there are three distinct areas of functionality that are required for TMD management (or PDSs for that matter). Firstly, I want to manage each piece of text once. If it goes into 1 or 3 or 300 documents, I still only want to manage it in one place. I hate double handling with a passion. Secondly, I want to be able to publish directly from the system, as transposition (copying) errors happen way too often when documents are typeset. And thirdly, I want to handle all the sign offs and evidence collection in the same place. And for the cherry on top, I’d like a full audit trail too please. In short, make my life easier, and help me sleep better at night.

That’s why Objective Keystone is the only system that we recommend for TMD management. By combining all the features mentioned above, you not only save bucketloads of time, but the risk management and audit is exactly what you (and your board and executive) need.

That’s why Objective Keystone is the only system that we recommend for TMD management. By combining all the features mentioned above, you not only save bucketloads of time, but the risk management and audit is exactly what you (and your board and executive) need.

Sarah Penn

Founder and CEO - Mayflower Consulting

As they say, with change comes opportunity. Why not use the new TMD requirements as an opportunity to bring a step change to your business through the addition of the only fit-for-purpose, tried and true technology – Objective Keystone.

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