Target Market Determination
NAB Business Markets Loan
Determination Criteria Description
Start date
16/10/2021
First and ongoing review
period
The first review, and each ongoing review, must be completed within each consecutive 12 month period
from the Start Date.
Product NAB Business Markets Loan
A Business Markets Loan is an interest in arrears term loan with market-linked pricing and embedded
interest rate risk management options.
Target Market
Target market &
product attributes
Consumer needs and objectives Product attributes
A person that may seek a flexible and easy to use
loan for approved business or investment purposes
with market linked pricing and embedded interest
rate risk management options.
This loan facility provides access to a fixed term
facility with the following key attributes:
•
it is not a regulated credit contract
under the National Consumer Credit
Protection Act 2009
•
the ability to use credit for an approved
business or investment purpose
•
market linked pricing
•
interest rate risk management options
including:
-
floating rate
-
fixed rate
-
capped rate
-
flexible maturity fixed interest
rate.
Consumer financial situation
Product attributes
A person that:
•
has access to sufficient income to meet
the following payments:
-
upfront fees
-
ongoing fees
-
principal amounts due
-
interest amounts due
•
has a defined exit strategy to pay the
outstanding amount due at the end of the
loan term.
This fixed term loan facility requires minimum
payments including:
•
upfront fees
•
ongoing fees
•
principal amount
•
interest repayments.
A person that wants flexibility of a loan structure
which does not need to be agreed upfront and
ability to add new components easily with no
additional documentation required.
This fixed term loan facility provides flexible
repayment options including:
•
ability to have multiple interest rate
components all within the one loan and
with one interest payment
•
interest only or principal plus interest
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payments.
A person that is comfortable with a market- linked
floating interest rate whilst retaining the
opportunity to enter into a fixed rate option at a
future date.
A person that wants the flexibility to make extra
repayments and save interest with ability to redraw
funds up to available limit.
This fixed term loan facility provides floating
interest rate option with:
•
flexibility of making extra repayments
•
ability to redraw funds up to available
limit.
A person that wants to manage their interest rate
risk by having certainty of interest rate costs and
repayment amounts during an approved term.
This fixed term loan facility provides access to the
following interest rate options which can be used
to manage interest rate risk and provide certainty
of interest costs and repayment amounts:
•
Fixed – Rate fixed for the duration of
approved term of component
•
Capped – A floating interest rate term
component that incorporates an agreed
maximum interest rate (the ‘Cap’).
•
Flexible Maturity Fixed - Rate fixed for
the duration of approved term of
component with the option to extend
term.
Redraw is not available on fixed rate components.
Negative target
market
statement:
Not suitable for a person requiring loan for predominantly non-business or non-investment purposes.
Appropriateness
statement
NAB has considered that the product including its key attributes is appropriate for the target market
including the likely objectives, financial situation and needs of consumers in the target market.
Distribution Conditions
Authorisation
This condition applies
to all conduct
Condition 1
A distributor must:
•
hold an Australian Credit Licence or be a Credit Representative authorised to engage in
credit activities on behalf of a credit licensee unless an exemption applies covering the
provision of credit activities in respect of the product; and
•
if the distributor is not NAB:
-
comply with the terms and conditions of any relevant distribution agreement or
arrangement with NAB
-
if applicable, comply with the terms of any licensing exemption covering the provision of
credit activities in respect of the product.
This condition is appropriate as it ensures distributors are appropriately authorised to provide the
relevant regulated financial services and will comply with the commercial terms agreed between the
distributor and NAB.
General advice
including Marketing
This condition applies
to general advice
(including most
marketing)
Condition 2
A distributor must only provide general advice (such as marketing) as to the product if:
•
a Target Market Determination (TMD) has been made and published for the product and has
not been withdrawn
•
the distributor complies with the terms of the TMD for the product
•
the general advice is consistent with the consumer needs, objectives and financial situation
defined in the target market for the product; and
•
ASIC has not issued a Product Intervention Power restricting the publication of general
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advice for the product by the distributor.
A distributor may provide general advice (such as marketing) as to the product through public channels
such as:
•
television, radio, internet (including social media), billboards and physical banners,
periodicals, brochures and other marketing material available to the general public
•
advertising through comparison sites and rating agencies
•
NAB Branch
•
NAB Business Banking Centre
•
NAB Relationship Bankers
•
NAB Accredited Brokers
•
NAB's Call Centre
•
NAB's Mobile Application
•
NAB's Website
•
Direct Mail
•
Direct Email.
This condition is appropriate as the target market is wide.
It is intended that these channels may be available to persons who would not at that time qualify for
the product to be issued to them in a regulated sale, for example because they are minors or do not
have the income to service the product. This is because the issue of the product is subject to
Distribution Conditions 1, 3 and 4 which will ensure that the product is only issued to persons for
whom it will be appropriate.
Retail product
distribution conduct
(other than General
Advice)
These conditions apply
to all retail product
distribution conduct
that is not general
advice
Condition 3
A distributor must only engage in retail product distribution conduct (other than general advice) if:
•
a TMD has been made and published for the product and has not been withdrawn
•
the distributor complies with the terms of the TMD for the product
•
ASIC has not issued a Product Intervention Power restricting the distribution of the product for
the distributor; and
•
the distributor has complied with Condition 4.
A distributor must only engage in retail product distribution conduct (other than general advice) through:
•
NAB Business Banking Centre
•
NAB Relationship Bankers
•
NAB Accredited Brokers
•
Direct Mail
•
Direct Email.
This condition is appropriate as the issuer has distributed this product using these methods,
with limited
risk to consumers.
Condition 4
A distributor must only engage in retail product distribution conduct (other than general advice) if they
have identified:
•
that the distribution of the product is consistent with the consumer needs, objectives and
financial situation defined in the target market for the product
•
that the person is willing and able to pay the upfront and ongoing fees and the required
minimum repayments including principal and interest to access the key attributes of the
product
•
that the person is seeking access to a term loan with the following key attributes:
-
the ability to use credit for an approved business or investment purpose
-
market linked pricing
-
interest rate risk management options including:
floating rate
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fixed rate
capped rate
flexible maturity fixed interest rate option rate
•
the key difference between:
-
the product (including the specific product option requested by the person); and
-
the other product options for the product and other separate credit products issued by
NAB for wholly or predominantly business purposes or investment purposes that are not
credit contracts regulated under the National Consumer Credit Protection Act.
This condition is appropriate as it requires a distributor to confirm that the consumer is in the target
market.
Review Triggers
Review triggers
NAB and any distributor of this product, must cease all retail product distribution conduct (except
excluded conduct) in respect of this product within 10 business days of NAB identifying a review
trigger unless:
• NAB has determined that this TMD continues to be appropriate; or
• a new TMD has been made.
The events and circumstances described below will trigger a review of this TMD if NAB determines it
may relate to the appropriateness of the TMD having regard to NAB's internal policies.
NAB will publish notice of a review on its website.
complaints
NAB actively monitors consumer complaints and will review the appropriateness of
the TMD where complaints in number or significance relate to:
•
consumer understanding of the risks, key terms, conditions or key
attributes of this product
•
ability to repay the principal amount and interest amounts owed under
the facility
•
fixed interest rates and fixed rate periods
•
variable interest rates and variable rate periods.
performance
NAB actively monitors product performance indicators relevant to the product and
will review the appropriateness of the TMD in circumstances where:
• evidence shows that the financial situation of consumers in the target
market may not be met including monitoring of:
-
customers experiencing disproportionate rate of delinquencies
• evidence shows that the needs and objectives of consumers in the
target market may not be met including monitoring of:
-
distribution outside the eligible loan purpose
-
changes to key product attributes.
distributors
Reporting received from distributors, or consistent feedback from distributors
which suggests that the target market or product attributes may no longer be
appropriate.
Refer to Reporting.
product
change
NAB makes a substantial change to the product terms, conditions or key product
attributes including:
• adding to, removing or changing a product attribute
• a substantial pricing change which impacts the consumer value
proposition of the product
•
significant changes to a distribution channel and distribution strategy.
change to the
external
• Regulatory or legislative environment for this product.
• Economic and market conditions.
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This product is issued by National Australia Bank Limited ABN 12 004 044 937 AFSL and Australian Credit Licence 230686.
NAB receives a notification from ASIC requiring immediate cessation of product
distribution or particular conduct in relation to the product.
dealings
Evidence that the distribution of the product or distributor conduct are significantly
different to the expectations set out in the TMD.
Reporting
Reporting period The Reporting Period for this determination is quarterly during each calendar year:
• First reporting period ending on 31 March.
• Second reporting period ending on 30 June.
• Third reporting period ending on 30 September.
• Fourth reporting period ending on 31 December.
Reporting information A distributor must provide the following information in writing as soon as practicable or within 10
business days after the reporting period unless otherwise specified.
Complaint
information
Complaints related to the risks, key terms, conditions or key attributes of this product
including:
• the number of complaints
• the nature and circumstances of the complaints
• whether or not there has been or is likely to be consumer harm or detriment, and
if so, the nature of the harm or detriment.
Feedback from
distributors
Feedback that the target market or key product attributes may no longer be
appropriate, including about:
•
ability to repay the principal amount and interest amounts owed under the
facility
•
fixed interest rates and fixed rate period
•
variable interest rates and variable rate periods.
Significant
dealings
If a distributor becomes aware of a significant dealing in the product or an issue with
the distributor conduct that is not consistent with the TMD, they must notify the
issuer in writing as soon as practicable, and in any event within 10 business days
after becoming aware.
Other
information
requested by
NAB
Any other information requested in writing by NAB from time to time subject to:
• The request being necessary to enable NAB to meet its legal and compliance
obligations; and
• NAB providing at least 30 days prior notice before the end of the Reporting
Period.