Financial Services Snapshots

Financial Markets

ASIC consults on updates to industry code approval guidance

On 24 July 2025, ASIC announced proposed updates to Regulatory Guide 183 Approval of financial services sector codes of conduct (RG 183). Approval of industry codes by ASIC remains voluntary, but such approval signals credibility to consumers. RG 183 details ASIC's approach to code approval and the requirements for obtaining and maintaining it.

The proposed changes are designed to ensure that ASIC's guidance on the approval of industry codes of conduct remains current, clear, and fit for purpose. The updates aim to:

• reflect recent legislative changes, including those from the Financial Sector Reform (Hayne Royal Commission Response) Act 2020;
• clarify ASIC's role, as well as the criteria and process for code approval; and
• simplify and streamline the guidance.

No consultation paper has been issued. However, ASIC welcomes feedback on whether the updated guidance is sufficiently clear and any suggestions for improvement. Submissions are due by 1 September 2025.

See: Media Release; Draft Updated RG 183

Financial Services

ASIC seeks feedback on conflicts management guidance updates

On 30 July 2025, ASIC published a consultation paper outlining proposed updates to Regulatory Guide 181 Licensing: Managing conflicts of interest (RG 181). This forms part of ASIC's broader regulatory maintenance work to ensure its regulatory guides remain clear, effective and current.

The updated guidance sets out how Australian financial services (AFS) licensees should comply with their conflicts management obligation. It covers:

• the application, scope and interaction of the obligations to identify and manage conflicts of interest under the Corporations Act 2001 (Cth) with other related obligations;
• the types of conflicts AFS licensees need to identify and manage to meet their obligation;
• the need to have robust and tailored arrangements that are adequate to manage conflicts; and
• how licensees can effectively manage conflicts.

The need for further clarification on conflicts of interest was highlighted in a number of submissions to ASIC's discussion paper on the evolving dynamics between public and private markets, released in February 2025.

Through these proposed updates, ASIC aims to provide clear, modern guidance for AFS licensees on managing conflicts of interest, supporting fair and efficient markets. ASIC is seeking feedback on the proposals, with submissions due by 5 September 2025.

See: Media Release; Consultation Paper 385; Discussion Paper

Banking

ASIC Chair Joe Longo outlines approach to artificial intelligence in banking sector

On 23 July 2025, ASIC Chair Joe Longo delivered a keynote address at the ABA Banking Conference in Sydney, presenting ASIC's current stance on artificial intelligence (AI) within the banking industry. Mr Longo emphasised both the opportunities and risks associated with AI, highlighting the need for customer-centric innovation and responsible adoption. Mr Longo made it clear that while ASIC supports innovation, it will not tolerate technology that harms customers.

The key points that Mr Longo addressed are as follows:

• Opportunities and public trust: Mr Longo observed the rapid advancement of AI and its potential to enhance banking services and productivity. He referenced recent research indicating a decline in public trust in AI among Australians, and suggested that banks, given their technological capabilities and governance structures, are positioned to demonstrate the benefits of AI and help build public confidence;

• Regulatory approach: Mr Longo clarified that ASIC does not plan to introduce new AI-specific regulations at this stage, as existing technology-neutral laws already provide safeguards. Mr Longo warned that additional, narrowly targeted regulation could increase complexity and compliance costs, potentially stifling innovation. However, he acknowledged that further regulation may be needed as AI evolves, and regulators must use their current powers effectively; and
• Oversight and enforcement: Mr Longo also noted that ASIC will monitor the use of AI in the sector and take enforcement action where irresponsible use or consumer harm is identified. He emphasised that effective AI innovation should prioritise customer outcomes and that banks should use technology to proactively address issues, such as excessive fees, rather than relying on regulatory intervention.

In summary, Mr Longo described AI as an opportunity to strengthen customer-centric banking, and confirmed that ASIC will support responsible innovation while maintaining oversight to protect customer interests.

See: Media Release

APRA proposes reforms to licensing framework

On 30 July 2025, APRA released a discussion paper proposing significant improvements to the licensing framework for ADIs. The objective is to streamline the process, making it clearer and more efficient for new entrants across the banking, insurance, and superannuation sectors, while upholding strong regulatory standards to ensure financial system stability.

The key proposals are as follows:

• Introduction of clearer licensing criteria: APRA plans to replace current guidelines with a formal set of explicit licensing criteria, providing greater clarity for applicants about what is required to obtain a banking licence;
• Faster and more transparent decisions: Under the proposals, applicants would have 12 months from the date of application to satisfy the new criteria. APRA would then aim to reach a licensing decision within a further three months. To promote transparency, all licensing decisions, including refusals, would be published;
• Review of the Restricted ADI (RADI) pathway: APRA is seeking feedback on whether to discontinue the RADI pathway, which was introduced in 2018 to support new entrants but has seen limited recent uptake and presented operational challenges for applicants.

These proposals are based on APRA's assessment of recent experiences with new entrants, incorporate international best practices, and are consistent with broader efforts to support competition and efficiency in the banking sector.

APRA is inviting stakeholders to submit feedback on the proposed changes, as well as suggestions for further improvements to the licensing process, including ways to ensure requirements are proportionate. Written submissions are requested by 31 October 2025. After considering stakeholder input, APRA will consult on the finalised criteria and provide supporting guidance for future applicants.

See: Media Release; Discussion Paper