On 30 July 2025, the Australian Securities and Investments Commission (ASIC) issued Consultation Paper 385 ‘Proposed update to RG 181 Licensing: Management conflicts of interest’ (CP 385).

Background

An Australian financial services (AFS) licensee must comply with section 912A(1)(aa) of the Corporations Act 2001 (Corporations Act), which sets out the general obligation to have adequate arrangements in place to manage conflicts of interest in relation to the provision of financial services within their financial services business.

ASIC issued Regulatory Guide 181 (RG 181) in August 2004 which sets out the regulator’s general approach to compliance with section 912A(1)(aa) of the Corporations Act and provides guidance for licensees generally on controlling and avoiding conflicts of interest and disclosing conflicts of interest.

Consultation

A range of relevant reforms and changes in financial products and services are currently not reflected in RG 181.  Industry has also had the benefit of key judicial decisions since the original RG 181. In addition, ASIC has had the benefit of significant regulatory experience since publishing RG 181. Recent surveillance activities, case law and feedback from recent submissions including ASIC’s discussion paper ‘Australia’s evolving capital markets: A discussion paper on the dynamics between public and private markets’ have provided deeper insights into effective conflicts management across different sectors, including wholesale markets.

In CP 385 ASIC is consulting on updates to RG 181 so that the guidance aligns with developments in law and policy and is fit for purpose to assist AFS licensees comply with their legal obligations. The proposed updates include updated guidance on the types of conflicts of interest that an AFS licensee should consider (including illustrative examples), additional guidance on what ‘adequate arrangements’ involve, and a roadmap that sign-posts other related conflicts management obligations that AFS licensees need to be aware of.

Next steps

The deadline for comments on CP 385 is 5 September 2025.

ASIC expects to publish the updated RG 181 in December 2025.