The Australian Securities and Investments Commission (ASIC) has initiated a consultation process on proposed updates to its guidance for managing conflicts of interest within financial services businesses.
The revisions, which affect Regulatory Guide 181 (RG 181), aim to reflect changes in the legal and policy landscape since the last update in 2004 and incorporate insights from ASIC’s recent surveillance of private markets.
ASIC Commissioner Kate O’Rourke described conflicts management as a central responsibility for Australian financial services (AFS) licensees.
“Conflicts management is a core obligation for financial services businesses and helps promote consumer protection and market credibility,” she said. “Conflicts of interest are more than mere moral dilemmas. They can undermine trust, integrity, and performance, causing serious harm to consumers, investors, and overall market confidence.”
The draft guidance clarifies how AFS licensees should comply with their obligations under section 912A(1)(aa) of the Corporations Act 2001.
It covers the legal framework, the identification and management of conflicts, and the importance of implementing arrangements that are both robust and tailored to the specific risks faced by each business.
The document also outlines practical steps for managing conflicts and includes a roadmap to related regulatory obligations.
ASIC’s consultation is part of a broader regulatory maintenance effort and aligns with the regulator’s agenda to simplify and clarify requirements for industry participants.
The updated guidance is intended to promote transparency and consistency across financial products and markets.
ASIC is seeking feedback from stakeholders through Consultation Paper 385, with submissions accepted until 5 pm AEST on Sept. 5.
Conflicts of interest remain a significant concern in the financial services sector, contributing to instances of misconduct and harm to consumers and investors.
The obligation to manage conflicts applies broadly to all situations arising within a financial services business, except those entirely outside its scope.
ASIC’s recent discussion paper on the interaction between public and private markets highlighted the need for further clarification in this area, based on industry submissions.
The regulator also plans to release findings from its review of auditor independence and conflicts of interest compliance later in the year.
In a separate initiative, ASIC is also requesting input on the renewal of five financial reporting relief instruments scheduled for repeal on Oct. 1.
Following a review, ASIC has determined that these measures continue to serve their intended purpose and proposes only minor amendments to ensure consistency with current drafting standards.
One of the proposed clarifications specifies that ASIC Instrument 2015/251, which provides relief from financial reporting and Annual General Meeting requirements for externally administered bodies and entities in wind-up, does not apply to registrable superannuation entities.
Other instruments under review address financial statement preparation for certain entities, such as allowing non-reporting entities to use specific accounting concessions (ASIC Instrument 2015/841), permitting disclosure of significant acquisitions or disposals after the balance date (ASIC Instrument 2015/842), and enabling consolidated reporting for registered schemes (ASIC Instrument 2015/839) and stapled groups (ASIC Instrument 2015/838).
The consultation period for these proposals is open until 5 pm AEST on Aug. 1. Submissions can be sent to rri.consultation@asic.gov.au.
Further details are provided in ASIC’s Consultation Statement 24.
