January 2, 2026
In 2026, financial regulators across the Asia-Pacific (APAC)region are homing in on employee conduct and conflicts of interest as top priorities. A common theme we are seeing across these regulators is a clear shift from policy to practice. Regulators expect firms to move beyond “tick-box compliance” and actively enforce internal policies across ethics, insider trading, AML/CFT, “fit and proper”, and mitigating conflicts of interest.
APAC regulators are sending the message that ethical conduct and conflict management are fundamental obligations for financial firms. See our comprehensive overview of how regulatory expectations are evolving in 2026, with a greater focus on employee ethics and conduct and conflict-of-interest risk.
Australian regulators have reinforced their expectations of firms regarding the mitigation of employee conduct and conflicts of interest. The Australian Securities and Investments Commission (ASIC) explicitly warns that conflicts of interest are more than just “ethical dilemmas”. It says these are “real threats that erode trust, tarnish reputations, and cause lasting harm”.
In December 2025, ASIC updated its regulatory guidance (RG 181) on managing conflicts of interest for financial services firms, highlighting that effective conflict management is “more than a regulatory checkbox—it’s the cornerstone of trust in financial services”. The update to RG 181, the first since 2004, sets out clearer principles and practical steps for firms to identify and mitigate conflicts, ranging from employee personal trading to incentive structures. Additionally, ASIC pairs guidance with enforcement. The regulator’s 2026 enforcement priorities continue to focus on insider trading and market misconduct, with an emphasis on investigations and prosecutions. ASIC Deputy Chair Sarah Court explains, “We won’t hesitate to take enforcement action to stamp out misconduct in the sector so we can support confident and informed participation, investor protection and market integrity.”
Meanwhile, the Australian Prudential Regulation Authority (APRA) aims to raise governance standards and address potential misconduct and conflicts of interest. APRA’s recent governance reform proposals, if enacted, will require regulated entities to consider perceived conflicts, as well as actual and potential conflicts. As of APRA’s October 2025 update, the regulator also intends to require that all regulated entities should develop registers of relevant duties and relevant interests to identify and mitigate potential conflicts of interest. However, APRA will not require insurers and banks to publish these registers.
ASIC and APRA’s guidance and enforcement priorities reflect Australia’s regulatory focus on internal conduct risk controls, from insider trading enforcement to conflict-of-interest policies, to ensure that firms and individuals meet their regulatory obligations.
The Monetary Authority of Singapore (MAS) emphasised in its latest Enforcement Report that cracking down on market abuse, including insider trading and false trading, and enforcing AML/CFT controls are “evergreen” priorities. As identified in the report, market misconduct cases accounted for the largest share of MAS’s investigations, underscoring its commitment to pursuing manipulative, unethical employee trading practices.
AML/CFT controls will be under MAS scrutiny this year. In July 2025, the regulator took significant enforcement action against nine financial institutions (FIs) and various individuals for AML-related breaches. MAS imposed composition penalties totalling S$27.45 million on nine financial firms for “poor or inconsistent implementation” of AML/CFT policies and controls. MAS highlights a key shortcoming of eight of the nine FIs in their transaction monitoring processes, failing to “adequately review relevant transactions flagged as suspicious by their own systems”.
MAS also continues its uncompromising stance on broader internal control failures. Under the Guidelines on Individual Accountability and Conduct, MAS expects senior managers to instil a compliance culture and for firms to have clear policies on employees’ personal trading, gifts and entertainment, and disclosure of conflicts. See our detailed article about MAS’ Guidelines for more information.
Hong Kong’s Securities and Futures Commission (SFC) is showing keen interest in the conduct of accountable persons and that they are deemed “fit and proper” for their respective roles.
The SFC’s 2024-2026 Strategic Priorities clarify the regulator’s statutory objectives, including minimising crime and misconduct in the industry, providing protection for the investing public, and maintaining and promoting a fair, efficient, competitive, transparent, and orderly securities and futures industry.
The regulator recently flexed its enforcement muscles over conflicts-of-interest breaches. In late 2024, the SFC banned the responsible officer (RO) of an asset management firm for life and fined him HK$1.7 million for gross misconduct. The RO manipulated the firm’s financial position on several occasions and provided false or misleading information in the financial returns submitted to the SFC. Additionally, the SFC found the firm deficient in its conflict-of-interest and risk management practices. In one of the firm’s funds, it invested substantially all of its assets in debentures issued by companies controlled by the RO. The SFC found that the firm “failed to avoid conflicts of interest and properly manage the risks of the fund, resulting in [the RO] granting loans to himself with the investors’ subscriptions”.
The SFC’s Enforcement Director, Christopher Wilson, reinforces that “the SFC will make full use of powers and tools at its disposal to hold asset managers and their senior management accountable for failing to comply with the applicable regulatory requirements”. This case highlights the need for firms to ensure all staff are deemed “fit and proper” for their respective roles and to pay close attention to potential conflicts of interest and misconduct.
The SFC also released new Market Sounding Guidelines in 2025. Market sounding practices that help “sound out” potential investors and set the appropriate price for financial instruments on offer are now under increased scrutiny. The regulator is working to prevent disclosure, misuse and leakage of sensitive information. The SFC notes that breaches may influence its assessment of the “fit and proper” status of registered or licensed individuals.
Meanwhile, Hong Kong’s banking regulator, the HKMA, is driving a Bank Culture Reform initiative, pressing banks to strengthen governance, embed sound ethics, and weed out “rolling bad apples” who hop between firms to escape past misconduct cases. In 2025, the HKMA rolled out Phase 2 of a Mandatory Reference Checking (MRC) scheme to ensure that banks share information on misconduct by would-be hires. Under the initiative, candidates must first consent to reference checks, after which their previous employers need to provide fact-based conduct information covering the past seven years using a standard template. This approach aims to prevent individuals with compliance red flags from moving through the industry unchecked.
In 2026, a key message from Hong Kong’s regulators is that firms must actively cultivate a culture of compliance. From managing employee conflicts to ethical conduct at all levels, firms must equip themselves with the tools to meet regulatory expectations and uphold market integrity.
In the wake of past scandals, such as the high-profile 1MDB case, the Securities Commission Malaysia (SC) has taken a zero-tolerance stance against bribery and corruption, conflicts of interest, insider trading, and the misuse of material non-public information (MNPI). The 1MDB saga saw the SC achieve notable court victories against insider trading and conflicts of interest, with Malaysia’s federal court imposing penalties up to three times the illicit profits.
In 2026, Malaysia’s banking sector overseer, Bank Negara Malaysia, is targeting broad themes of finance for all, finance for transformation, and finance for sustainability. Within these overarching themes, it aims to “shape a financial system that upholds fair and responsible dealings with financial consumers”. The overseer’s desired outcomes for 2026 include conduct risk identification, ethical use of technology, and consumer protection reforms. The bank is also looking to greater adoption of technology for regulation and supervision.
At the Annual Conference of Financial Street Forum, held in October 2025 in Beijing, Chinese Vice Premier He Lifeng said that China's financial system needs to “advance risk prevention, strengthen regulation, promote high-quality development and push for high-standard opening-up”. The State Council Information Office reports on He’s desire to see high-quality financial development and accelerated efforts to become a country with a strong financial sector.
Pan Gongsheng, Governor of the People’s Bank of China, also disclosed that a comprehensive macro-prudential regulation system is a key focus for the central bank over the next five years. Priorities also include continuous expansion of macro-prudential regulation coverage, mitigating systemic financial risks at their source, and enhancing the country’s financial system resilience.
Additionally, Pan commented that appropriate regulatory measures commensurate with their level of significance should be implemented through regular supervision.
As the country takes further steps in 2026 to open up its markets to the international stage, its regulatory bodies are taking a considered approach to balancing financial development and security.
Wu Qing, chairman of the China Securities Regulatory Commission (CSRC), also spoke about an intensified reform of investment and financing in capital markets, guided by a “focus on risk prevention and high-quality development”, and strengthened supervision.
This risk-aware approach aligns with the themes set out in the CSRC’s first press briefing under its new chairman, Wu Qing. The South China Morning Post reported at the time on the CSRC’s tougher stance on market manipulation and underhanded trading. In 2026, the regulator has signalled efforts to target insider trading and market manipulation more precisely, while removing regulatory blind spots.
Indian regulators are strengthening rules and oversight to address conflicts of interest and misconduct by financial industry employees.
The Securities and Exchange Board of India (SEBI) rolled out significant reforms to the insider trading framework in 2025, broadening the definition of Unpublished Price Sensitive Information (UPSI) and amending trading window closure rules. These measures aim to strengthen insider trading compliance and reflect SEBI’s determination to plug gaps that previously allowed insiders to exploit market-moving information.
Indonesia’s Financial Services Authority (Otoritas Jasa Keuangan or “OJK”) is actively strengthening governance standards to address conflicts of interest and improve conduct risk management.
To ensure the implementation of the five basic principles of Good Governance in banks (transparency, accountability, responsibility, independence, and fairness), banks are required to conduct a self-assessment, which consists of several assessment factors.
In 2025, the OJK released Circular Letter No. 14/SEOJK.03/2025 with new governance implementation guidelines for commercial banks. It expanded banks’ self-assessment criteria from 11 to 16 indicators, adding metrics for anti-bribery/anti-fraud programs, sustainable finance, and group-wide governance.
Crucially, the OKJ circular gives detailed guidance on preventing and managing conflicts of interest, especially in related-party transactions. It stipulates that any transaction involving parties with a special relationship must be carried out on terms no more favourable than those offered in transactions with unrelated parties. Banks must clearly define “related parties”, set exposure limits, and conduct independent audits of those dealings. Banks must now establish policies and procedures governing transactions with parties that have special relationships with the bank to ensure proper risk oversight and prevent conflicts of interest.
With governance and conflict-of-interest requirements strengthened, Indonesian banks must ensure they have internal processes and controls for insider lending (where directors or staff take actions that benefit themselves or related parties), employees’ outside affiliations, and gift, entertainment, and hospitality practices.
Regulators across APAC have laid significant groundwork to support greater scrutiny over employee conflicts of interest and ethical behaviours in 2026. Intent alone is no longer enough; regulators have made it clear that firms must be proactive in managing employee compliance risks. From enhanced Market Sounding Guidelines in Hong Kong to harsh penalties for AML/CFT failures imposed in Singapore, regulators are setting and enforcing the expectations that firms and employees will be accountable for compliance gaps.
Keeping a step ahead of regulatory expectations, particularly across different regions of operations, is a significant challenge for financial firms in APAC. However, this is where Regulatory Technology (RegTech) solutions can be invaluable. MyComplianceOffice (MCO) is one solution that provides a complete compliance management platform. It helps firms translate policy into practice and enhance oversight of employee behaviours.
MCO brings deep visibility into how employee behaviours align with policies across multiple areas of employee conflicts of interest. The system can extend across the entire Know Your Employee (KYE) landscape, including Personal Account Dealing to Outside Business Activities, Close Personal Relationships, Role and Responsibilities Needs, and even eCommunications Surveillance and Archiving. Compliance teams gain a complete picture and can more rapidly take corrective action, while proving to regulators they meet record-keeping requirements across all areas of employee conflicts of interest.
Consider your firm’s need for a comprehensive, automated compliance solution with full audit trails to build a more responsive, risk-informed compliance framework across all aspects of employee conduct and conflict-of-interest management.
