On the pulse
ASIC seeks feedback on proposed updates to conflicts management guidance – see media release.
ASIC report: Banks to put more than $93 million back in the pockets of low-income customers after charging excessive fees – see media release.
ASIC: Updated Council of Financial Regulators Charter and Memorandum of Understanding – see Memorandum of Understanding.
ASIC to act on recommendations in Council of Financial Regulators' report on small and medium-sized banks – see media release.
ASIC proposes to remake relief instrument for managed investment product consideration – see media release.
APRA proposes changes to create a simpler and more efficient bank licensing framework – see media release.
RBA and APRA update their Memorandum of Understanding – see media release.
APRA’s plans to support small and medium-sized banks – see media release.
Compensation Scheme of Last Resort – exceeding the sub-sector levy cap – see media release.
Parliamentary inquiry into capability of law enforcement to respond to money laundering and financial crime – see inquiry.
ASIC
ASIC seeks feedback on proposed updates to conflicts management guidance
ASIC has released proposed updates to its conflicts management guidance for financial services businesses. Regulatory Guide 181 Licensing: Managing conflicts of interest was last updated in August 2004.
The updated guidance sets out how Australian financial services (AFS) licensees should comply with their conflicts management obligation and explains:
How the law applies, including its scope and interaction 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.
How licensees can effectively manage conflicts.
Submissions in response to the proposed updates close 5 September 2025.
See ASIC media release and also consultation paper.
ASIC report: Banks to put more than $93 million back in the pockets of low-income customers after charging excessive fees
ASIC has released Report 811 Better and beyond: Expanding better banking outcomes to more low-income Australians detailing banks’ responses to excessive fees charged on transaction accounts, affecting potentially millions of Australians.
This report follows on from Report 785 Better Banking for Indigenous consumers.
ASIC’s latest review found that, despite improvements made by banks during its surveillance, there is still work to be done. ASIC expects banks to regularly assess product design and distribution to ensure that customers have the most appropriate products and receive the appropriate support.
See ASIC media release.
ASIC: Working with other agencies and organisations – Memorandum of Understanding
On 29 July 2025, the Council of Financial Regulators (CFR), which comprises of ASIC, APRA, the Australian Treasury and the RBA, published an updated Charter, reinforcing cooperation arrangements for contributing to financial stability across its members. At the same time, the CFR also updated the related Memorandum of Understanding on Crisis Management, which sets out a framework for coordination across agencies to support the Australian financial system in instances of potential or actual financial instability. See CFR media release.
ASIC has also released a full list of other agencies and organisations with which ASIC has entered into a memorandum of understanding.
See ASIC’s Memorandum of Understanding.
ASIC to act on recommendations in CFR report on small and medium-sized banks
ASIC welcomes the release of the CFR’s Final Report of the Review into Small and Medium-sized Banks (CFR Report) and the Government’s response to the recommendations in the report.
The CFR Report contains a package of proposed changes to reduce regulatory costs for small and medium-sized banks and improve competitiveness with larger banks.
The proposals include two specific actions for ASIC:
Reduce the frequency of internal dispute resolution (IDR) data reporting for small banks (from 6 to 12 months).
Adopt ongoing processes to review regulatory reporting requirements for small and medium-sized banks to ensure that they are fit-for-purpose.
ASIC will action the reforms to reporting of IDR data as soon as possible and will shortly contact small banks to implement the recommended reduction in reporting frequency. ASIC will take a no-action position for small banks until the technical and system changes are formalised in approximately 2027.
See ASIC media release.
ASIC proposes to remake relief instrument for managed investment product consideration
ASIC released a consultation paper seeking feedback on its proposal to remake ASIC Corporations (Managed Investment Product Consideration) Instrument 2015/847, which provides relief for managed investment schemes registered before 1 October 2013 (excluding time-share schemes) regarding the pricing of interests.
The proposed remake aims to extend the instrument for five years, maintaining its effectiveness while introducing minor modifications to simplify documentation requirements for pricing discretions. These changes align with ASIC's current drafting style and reduce prescriptive elements in documentation provisions.
See ASIC media release and consultation.
APRA
APRA proposes changes to create a simpler and more efficient bank licensing framework
APRA has proposed changes to its bank licensing framework aimed at simplifying and speeding up the licensing process and better supporting new entrants to the banking sector.
In 2018, APRA revised the ADI licensing framework to encourage competition and innovation in the banking sector, including by introducing the Restricted ADI (RADI) pathway. As part of its standard practice of reviewing practices and policies, APRA recently reviewed the framework to reflect the experiences of recent new entrants and ensure that it remains fit-for-purpose in a fast-evolving operating environment.
As a result, APRA is proposing the following improvements to its ADI licensing framework:
Clearer licensing expectations: APRA would replace existing licensing expectations set out in guidelines with a more explicit and targeted set of formal criteria.
Quicker and more transparent licensing decisions: Future applicants would have 12 months from submitting their application to demonstrate that they meet APRA’s new licensing criteria. Following this period, APRA would target a licensing decision within three months, with all decisions made public.
Additionally, APRA is seeking feedback on the future of the RADI pathway, which has received limited take-up in recent years. While APRA believes that the RADI pathway has helped encourage new bank entrants, the pathway has not been as simple and effective as intended.
Consultation on the proposed changes is open for submissions until 31 October 2025. A discussion paper outlining the changes is also available: Improving the licensing framework for authorised deposit-taking institutions.
See APRA media release.
RBA and APRA update their Memorandum of Understanding
APRA and the RBA have published an updated Memorandum of Understanding (MOU), to further strengthen their cooperation and coordination arrangements in support of financial stability in Australia. The updated MOU sets out the RBA and APRA’s respective roles and responsibilities for contributing to financial stability, as well as arrangements for consultation, liaison and information sharing between the two agencies. The MOU also sets out specific arrangements for coordination between the RBA and APRA in relation to macroprudential policy, liquidity support, payments policy and crisis management.
The RBA and APRA also cooperate and coordinate with each other and other regulatory agencies on a multilateral basis through the CFR.
See APRA media release and also RBA media release.
APRA’s plans to support small and medium-sized banks
APRA will make changes to its banking framework to increase proportionality and reduce regulatory burden as part of the CFR Review into Small and Medium-sized Banks.
As noted in the Treasurer’s media release, the Government welcomed all nine actions from regulators and has accepted in-principle eight of the recommendations from the review. The Government will seek feedback on the final recommendations, which would involve APRA introducing a lighter-touch framework for very small banks, accompanied by adjustments to the Financial Claims Scheme.
The review concluded that the regulatory regime governing these banks was broadly fit-for-purpose and identified several areas where regulations could be changed to contribute to the ability of these banks to compete.
APRA will take four actions to better support competition from small and medium-sized banks:
Formalise a three-tiered approach to proportionality in the regulatory framework for banking to broadly align with large banks (the majors), medium banks (other banks that are ‘significant financial institutions’) and small banks.
Streamline, simplify and clarify the accreditation process that allows banks to use the internal-ratings based approach to calculating risk-weighted assets.
Better communicate to banks APRA’s decisions on minimum capital requirements under Pillar 2 of the Basel framework and what risks need to be addressed for certain capital adjustments to be removed or lowered.
Amend its bank licensing framework with the aim of making its expectations more transparent and the process more efficient. This decision was announced late last month.
See APRA media release.
Legislation and proposed legislation
Compensation Scheme of Last Resort – exceeding the sub-sector levy cap
The Assistant Treasurer and Minister for Financial Services has asked Treasury to consult on the statutory options available to deal with the Compensation Scheme of Last Resort (CSLR) 2025–2026 revised claims, fees and costs estimate.
The CSLR Operator published the revised estimate for the current levy period (2025–2026). The financial advice sub-sector estimate is larger than the $20 million levy cap. This triggers options under the CSLR’s governing legislation.
Submissions close 29 August 2025.
See Treasury media release and also consultation.
Parliamentary inquiry into capability of law enforcement to respond to money laundering and financial crime
The Parliamentary Joint Committee on Law Enforcement will inquire into and report on the capability of law enforcement to respond to money laundering and financial crime in accordance with its Terms of Reference. This continues the original inquiry, which was initiated before the ‘tranche two’ anti-money laundering and counter-terrorism financing reforms were introduced into Parliament.
See Committee inquiry.
Consultation on reforms to the retirement phase of superannuation
The Government is taking the next step in reforming and improving the retirement phase of superannuation to help deliver a more dignified retirement for more Australians.
On 7 August, the Government released consultation papers on two key planks of its retirement phase reforms to help ensure that Australians have the choice, guidance and products they need to make the most of retirement:
Retirement Reporting Framework - Consult hub – Submissions close 5 September 2025.
Best practice principles – superannuation retirement income solutions - Consult hub – Submissions close 18 September 2025.
See Treasury media release.
G+T articles
G+T Insight – Forensic investigation report prepared by Deloitte following a cyber-attack on Optus not privileged – provides an overview of the usefulness of the dominant purpose test for documents – Melissa Fai, Jet Whiting, Catherine Kelso, Peter Munro, David Baddeley and Tannu Gagguturu (31 July 2025).
G+T Insight – No surprises – ASX clarifies its approach to earnings updates for the 2025 results season – provides an overview of ASX’s reminder to listed companies of their obligations under ASX Listing Rule 3.1 – Justin Mannolini and Adam D’Andreti (29 July 2025).
Calendar dates
29 August 2025 – Deadline for submissions to ASIC consultation on remaking MIS relief instrument on exercise of pricing discretions.
29 August 2025 – Deadline for submissions to Treasury consultation on sustainable investment product labelling.
31 March 2026 – Amended AML/CTF obligations commence for existing reporting entities.
31 March 2026 – Tranche 2 entities may enrol as reporting entities with AUSTRAC.
1 July 2026 – Mandatory climate-related financial disclosures for Group 2 entities apply in respect of financial years starting on or after this date.
13 July 2026 – Key CDR obligations commence for non-bank lenders.
1 July 2027 – Mandatory climate-related financial disclosures for Group 3 entities apply in respect of financial years starting on or after this date.