FirstNet Adviser help

FNA Significant Dealings Help

When should I report Significant Dealings?

All CFS TMDs define 'Information Requirements' for Distributors within the Distributor Information Requirements section. This information includes any Significant Dealings. The 'Reporting Frequency' for each of the 'Information Requirements' will also be displayed. For Significant Dealings these must be reported as soon as practicable, but no later than 10 business days after the distributor becomes aware of the Significant dealing.

 

What are Significant Dealings?

Whilst Significant Dealings have not been defined within the Design & Distribution Obligations (DDO) Legislation it is important to note that the definition will vary across product Issuers and product Distributors. In ASIC’s DDO regulatory guide (RG274.159) they list the following factors for consideration when determining whether Significant Dealings have occurred outside a TMD;

(a) of those consumers who acquire the product, the proportion of consumers who are not in the target market, including the proportion of consumers who are part of a class that has been excluded from the target market acquiring the product;

(b) the actual or potential harm to consumers, including the amount of any financial loss, resulting from consumers who are not in the target market acquiring the product;

(c) the nature and extent of the inconsistency of distribution with the TMD (noting that distribution to a consumer can be either more or less consistent with a target market along a continuous spectrum);

(d) the proportion of gross income or premium obtained from the product in respect of consumers who are not in the target market acquiring the product; and

(e) the time period in which these acquisitions outside the target market occurred.

ASIC also note that this list isn't exhaustive.

Advisers must report any Significant dealings that are 'outside a CFS TMD' via this FirstNet Adviser page. Details of the factors above or others that make up any Significant Dealing/s can be captured in this page. CFS will review any report of Significant Dealings made within our TMDs & you may be contacted to discuss the details of Significant Dealings you report to us.

Example of Outside & Significant Dealings

A Diversified portfolio across multiple investments (TMDs) may represent an Outside dealing if an investment (& TMD dealing) within the diversified portfolio is considered high risk such as the 'Colonial First State Wholesale Index Australian Share' fund. In isolation, this isn't reflective of customer needs (diversification) so this TMD dealing would be considered 'outside the TMD'. Similarly, this could apply an investment within a diversified portfolio that is low risk & low return such as 'First Sentier Wholesale Strategic Cash'.

These could, over time, result in a Significant Dealing, relating to ASIC’s factor (a) above.