No. ASIC does not directly regulate artificial intelligence as a standalone technology. ASIC regulates the financial services, conduct and outcomes produced through the use of AI. When AFS licensees and advisers use AI in financial services, existing obligations continue to apply, including governance, risk management, client protection and compliance requirements.
Expanded Answer
ASIC’s position is that existing regulatory frameworks apply regardless of whether a process is performed by a person, software application or AI system. The use of AI does not create an exemption from obligations under the Corporations Act, AFSL conditions, breach reporting requirements, best interests obligations or conduct standards.
In practice, ASIC focuses on how AI is designed, deployed, governed and supervised within financial services businesses. Regulatory attention is directed toward issues such as misleading outputs, poor advice outcomes, inadequate oversight, conflicts of interest, privacy risks, discrimination, operational failures and weak governance arrangements. The key question is not whether AI is being used, but whether the resulting conduct complies with existing regulatory obligations.
Key obligations:
- Applies when AI is used within regulated financial services activities.
- Existing financial services obligations remain unchanged.
- Human oversight and accountability must be maintained.
ASIC has repeatedly highlighted governance, transparency, risk management and accountability as critical controls for AI adoption. Regulatory scrutiny increases where AI influences client outcomes, advice generation, decision-making processes or compliance functions. For further guidance, see Guide for advisers and licensees: navigating AI in financial services and The hidden risks of AI: ASIC’s review of licensees’ embrace of artificial intelligence.
Why it matters
A common misconception is that AI sits outside existing regulation. ASIC’s focus is on outcomes, governance and conduct. Businesses that treat AI as unregulated technology risk creating compliance failures, consumer harm and governance weaknesses that attract regulatory attention.
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Practical guidance
- Assess AI use cases against existing AFSL obligations and compliance controls.
- Document governance arrangements, accountability and oversight responsibilities.
- Monitor AI outputs for accuracy, consistency, fairness and regulatory compliance.
Further reading
Guide for advisers and licensees: navigating AI in financial services
The hidden risks of AI: ASIC’s review of licensees’ embrace of artificial intelligence
Avoid the AI trap: how to stay compliant and ahead of the game