Between the Corporations Act and Regulations, the ASIC Act and Regulations, the Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Act 2019, the Corporations Amendment (Design and Distribution Obligations) Regulations 2019 and the Banking Code of Practice there are multiple terms used for key retail consumer products: a basic account, a basic banking product and a basic deposit product and related products (such as non-cash payment products and travellers’ cheques). How a product is characterised affects how it is regulated.

The issue is highlighted when identifying the “financial products” for which issuers and distributors of financial products must comply with the design and distribution obligations in Part 7.8A of the Corporations Act 2001 (inserted by the Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Act 2019) from 5 October 2021.

While you may not need to provide a full Financial Services Guide, be registered as a financial adviser or have Tier 1 training or give a Statement of Advice for a basic deposit product, you will still need to ensure it has a Target Market Determination because it is a basic banking product under the Design and Distribution Obligations.

And the laws specify other products as financial products as well as other products which are not financial products.

Under the Banking Code of Practice, subscribers will need to make eligible customers aware of basic accounts which have minimum features.

Credit products can also be financial products for DDO purposes.

While working out what is a basic banking product may not be difficult for DDO purposes, there may be an effect for other compliance purposes.

It requires looking at products from the consumer’s point of view rather than an operational point of view.

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