Has a Significant Dealing in your product occurred lately?  Notification to ASIC is required

Alicia Pevely

Alicia Pevely

An integral member of the Sophie Grace team since 2012, Alicia has extensive experience in relation to financial services law, consumer credit law, regulatory matters and ASIC investigations. Working closely with her clients, Alicia has maintained a significant emphasis on AFS and credit licensing and liaising with ASIC. As General Manager, Alicia has oversight of all licence applications and provides advice and support in relation to more complex applications.  


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Under the Design and Distribution obligations, issuers of financial products are required to notify ASIC with relevant information where a significant dealing in a financial product occurs. Distributions of financial products have an obligation to notify the issuer of significant dealings.

Are you an Issuer and/or Distributor?

Issuers are licensees and product providers who:

Must prepare a disclosure document under the Corporations Act

For example:

  • Responsible Entities of managed investment schemes
  • insurers
  • issuers of non-cash payment platforms
  • OTC derivative issuers

Issue or sell a financial product under a regulated sale (within the meaning of the ASIC Act)

For example:

  • Credit providers who issue credit cards

Are required by the Corporations Regulations to make a Target Market Determination (TMD)

For example:

  • Issuers of basic banking products

Distributors are those people who deal in a financial product, provide a disclosure document in relation to offering a financial product, provide a Product Disclosure Statement (PDS) or provide financial product advice to retail clients and include:

  • Australian Financial Services Licence (AFSL) holders and authorised representatives;
  • Australian Credit Licence (ACL) holders and credit representatives;
  • persons who refer retail clients to another person who engages in financial services or credit activities;
  • distributors of basic deposit products, general insurance products and bundled consumer credit insurance products;
  • persons who are exempt from holding an AFSL or ACL in accordance with the applicable law.

What is a significant dealing?  

Significant dealings may occur when a financial product is distributed to a retail client and that distribution is not consistent with the TMD for the product. Whether the dealing is significant will be determined by a range of factors, including:

  • the proportion of retail clients who acquired the product and were not in the target market;
  • the actual or potential harm to retail clients including the amount of any financial loss which has occurred as a result of the distribution;
  • the nature and the extent of inconsistency of distribution with the TMD;
  • the proportion of gross income or premium income the issuer obtained from the product in respect of retail clients who are not in the target market acquiring the product; and
  • the time period in which the distribution outside of the target market occurred.

ASIC’s position is that if an issuer or distributor is unsure whether a dealing is significant, they should report it to ASIC or to the issuer.

How to report

Issuers have an obligation to notify ASIC of a significant dealing within ten (10) business days after becoming aware of the dealing. Issuers can lodge this notification via the ASIC Regulatory Portal. The information required to be provided to ASIC includes:

  • the date of the significant dealing;
  • a description of the significant dealing and why it is not consistent with the TMD;
  • why the issuer considers the dealing is significant;
  • how the significant dealing was identified;
  • any steps the issuer has taken in relation to the significant dealing.

Issuers can also provide updates to ASIC in relation to a significant dealing via the ASIC Regulatory Portal.

What next?

Issuers should ensure the appropriate people within their business have access to ASIC’s Regulatory Portal. Issuers should also review their procedures in relation to:

  • how they identify and assess significant dealings;
  • the processes and timeframes for distributors to report significant dealings to them;
  • review TMDs and the distribution conditions which are included;
  • assess review triggers that are included in the TMD to ensure they are appropriate.

Further reading:

Alicia Pevely

Alicia Pevely

An integral member of the Sophie Grace team since 2012, Alicia has extensive experience in relation to financial services law, consumer credit law, regulatory matters and ASIC investigations. Working closely with her clients, Alicia has maintained a significant emphasis on AFS and credit licensing and liaising with ASIC. As General Manager, Alicia has oversight of all licence applications and provides advice and support in relation to more complex applications.