A TMD is a document that details the target market for a financial product and matters relevant to the product’s distribution and review. As a product issuer it’s our responsibility to create a TMD for each of our products covered by DDO that:
- Describes the Target Market: Outlines the likely objectives, financial situation and needs of customers the product has been designed for.
- Establishes Distribution Conditions: Details the conditions or restrictions on the sale of the product.
- Establishes Reporting Requirements: Sets out the relevant information that must be provided to us by distributors at our required frequency. At a minimum, a distributor must regularly report the number of complaints it receives about the issuer’s product to the issuer, as well as report any significant dealings in the product that are inconsistent with the TMD.
TMDs do not replace Product Disclosure Statements (PDSs) nor do they lessen the importance of PDSs in the financial product decision-making process. TMDs set out who the financial product may be suitable for and how it can be distributed. It is important to note that the TMD is not a summary of the product features, nor does it outline the terms of the product. The PDS should always be referred to for the terms, conditions and features of the product before deciding whether the product is suitable for the consumer.