Conflicts management practices in the funds management industry under ASIC microscope

ASIC is urging all AFS licensees to review their own conflicts management practices following an extensive review of vertically integrated businesses in the funds management industry.

The call to action follows ASIC's release of Report 474: Culture, conduct and conflicts of interest in vertically integrated businesses in the funds-management industry which found deficiencies in many conflicts management policies studied. Key criticisms of the licensees studied included:

• conflicts management policies failed to specifically consider and address the key conflicts of interest in their organisation (especially in identifying and managing situations where different parts of the business are conflicted with the interests of the same clients or clients in other parts of the business); and