Australia’s corporate regulator says private-credit funds continue to obscure fees, conflicts and investment risks, after a review of 24 retail and wholesale funds managing a combined A$18 billion.
ASIC’s report released on 10 November found that nine of 12 retail funds did not clearly disclose information important to investment decisions, while 10 had target-market settings the regulator considered poorly designed. Eighteen of the 24 funds used layered intermediary structures, and some did not explain those arrangements or related-party transactions adequately.
Only two funds passed the full economic benefit of interest and borrower fees to investors. In the advice sample, 88 per cent of files recommending allocations above 20 per cent to private credit did not demonstrate compliance with the adviser’s best-interests duty.
The surveillance has led to six interim stop orders and several referrals for further enforcement investigation. Those steps are regulatory interventions, not final findings of liability. ASIC says it will also refresh managed-fund guidance and continue work on standards across private credit.
Read ASIC’s findings and Report 846
