Managing conflicts of interest has become a central pillar of ASIC’s supervision of Australia’s rapidly expanding private capital markets. Since mid‑2025, the regulator has significantly intensified its focus on conflicts arising in private equity, private credit and other wholesale fund structures, reflecting concerns about opacity, misaligned incentives and governance maturity in these markets.
Regulatory guidance and consultation outcomes
A key milestone was ASIC’s consultation on proposed updates to Regulatory Guide 181 (RG 181): Licensing – Managing Conflicts of Interest, released in July 2025 (CP 385). This consultation was explicitly informed by ASIC’s private markets surveillance and its broader discussion paper on Australia’s evolving capital markets. ASIC received 26 industry submissions, with broad support for updating guidance that had remained largely unchanged since 2004.
Following this process, ASIC issued a substantially revised RG 181 in December 2025, which now sets clearer expectations around what constitutes “adequate arrangements” for managing conflicts in contemporary markets. The revised guidance emphasises a risk‑based, proportionate approach, but also signals heightened scrutiny where conflicts are structural, recurring or inadequately disclosed—conditions ASIC considers more prevalent in private capital structures.
Specific focus on private capital market risks
ASIC has repeatedly identified conflicts of interest as a key risk in private markets, particularly given the informational advantages held by fund managers and the limited transparency available to investors compared with public markets. Areas of focus include related‑party transactions, valuation practices, fee and expense allocation, capital allocation across funds, preferential treatment of investors, and the handling of confidential information.
These concerns have been reinforced through ASIC’s private credit surveillance reports and its capital markets roadmap, which highlight inconsistent governance practices and immature conflict management frameworks across parts of the wholesale funds sector.
Supervisory and enforcement posture
In parallel with updated guidance, ASIC has elevated conflicts management into its 2026 enforcement priorities, particularly in relation to poor private credit practices. ASIC has made clear that it will move beyond disclosure‑based compliance and will test whether conflict frameworks are embedded in governance, decision‑making and day‑to‑day operations.
Practical implications
As at April 2026, ASIC’s message to private capital participants is clear: conflicts of interest must be identified early, actively managed and rigorously governed, not merely disclosed. Fund managers should expect ongoing supervisory engagement and should ensure their conflicts frameworks are tailored, documented and demonstrably effective in the context of private market complexity and growth.
