Financial services companies have been put on notice to start reviewing their products to determine how they will operate under new design and distribution obligations and ASIC's product intervention powers.In a note to clients, King & Wood Mallesons partner Jim Boynton says that even though product issuers have two years before the design and distribution obligations start, they should start reviewing products that will be affected.The bill introducing the new regime was passed last week, but not before it was amended to extend the regime to a wider range of products regulated by ASIC, including credit products. Under Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Power) Bill 2019, financial services companies will be required to identify the target market for their product and will need to design the product for that market. They will have to select appropriate distribution channels and periodically review those arrangements to ensure they continue to be appropriate.A "target market determination" must describe the class of retail clients that comprise the target market for the product, specify any conditions or restrictions on sale, specify events and circumstances that would suggest that the determination is no longer appropriate, and specify review periods.Boynton says that once the new design and distribution obligations take effect, a product cannot be distributed until a target market determination has been made. Groups with a large number of products may face some deadline pressure.Distributors of financial products will be required to take reasonable steps to ensure that products are distributed in accordance with the identified target markets. They will have to keep specified information for monitoring purposes.Distributors will be prohibited from distributing a product unless a current target market determination is in place.Distributors will have to notify a product's offeror, and the offeror will have to notify ASIC, of "significant dealing in a product that is not consistent with the product's target market determination."While the DDO regime is two years away, ASIC's product intervention powers commence immediately.The new law gives ASIC power to enforce the new arrangements, including stop orders and exemption powers. And it has the power to intervene where there is a risk of significant consumer detriment. Civil and criminal penalties apply to contraventions.Boynton says product reviews should take into account:•    whether the way the product is designed, promoted or distributed is likely to result in ASIC exercising its new product intervention powers, such as if ASIC has previously expressed concerns about the product or selling product;•    any likely changes to the way a product is distributed, given the Royal Commission's proposed commission changes and other changed affecting products, financial advisers and mortgage brokers;•    the prohibition on hawking that is proposed to apply to at least superannuation and insurance products; and•    the proposal that under the BEAR regime there will be an accountable person responsible for end-to-end management of products.