ASIC Intensifies Oversight on Private Credit Market

0

Speaking at the Investment Magazine Fiduciary Investors Symposium, Constant highlighted that this initiative is part of a broader multi-year program. Since the release of ASIC's discussion paper in February, major financial entities like Count have prompted advisors to reassess their involvement with funds associated with Metrics Credit Partners, underlining the ongoing debate regarding the appropriateness of private credit for retail clients.

Constant emphasised the need for scrutiny across the investment spectrum but identified retail investor interactions as a primary area of concern. She stated that ASIC is conducting related surveillance activities concerning the wider distribution of private credit products to retail investors.

The push for more stringent oversight by ASIC is critical as private credit grows in popularity among retail investors. The asset class offers an alternative investment opportunity and a credit source for borrowers, but with the rising distribution, the risks associated with suitability and transparency also increase. ASIC's accelerated attention aims to mitigate these risks and safeguard retail investors from unsuitable or high-risk products.

The regulator's intentions are not to stifle the market but to ensure the distribution practices align with proper governance standards and international benchmarks. Acknowledging the importance of private credit for the economy, Constant asserts that effective oversight and transparency need to be established without hastily imposing new regulations.

ASIC plans to release an expert insight paper to explore the future trajectory of Australia's capital markets, specifically focusing on the private credit environment and international transparency practices. The regulator’s proactive stance indicates an ongoing agenda to address the governance issues identified in recent reports.

Submissions from various industry stakeholders, including superannuation groups and financial councils, emphasise the need for balanced regulatory frameworks. They urge ASIC to avoid regulatory duplications while improving consumer protections. Notably, Super Consumers Australia has called for enhanced scrutiny to safeguard retail investors, particularly those investing in superannuation products.

As the private credit market is poised for growth, ASIC will continue to engage with industry experts and collect extensive feedback to refine its regulatory approach. This balanced strategy aims to increase investor confidence by ensuring the market's evolution is accompanied by robust investor safeguards and transparent practices.

Published:Thursday, 5th Jun 2025
Source: Paige Estritori

Share this news item:

Finance News

Clear

Westpac Faces Renewed Scrutiny Amid RAMS Loan Misconduct 06 Jun 2025: Paige Estritori Australia's financial sector is yet again under the spotlight as Westpac finds itself embroiled in another scandal involving irresponsible lending practices. The bank's RAMS home loans subsidiary faces serious allegations by the Australian Securities and Investments Commission (ASIC) regarding improper loan approvals. - read more

Cautious Spending Persists Despite Economic Stimuli 06 Jun 2025: Paige Estritori Australians continue to exhibit cautious spending behaviours, as evidenced by a modest uptick in expenditure during April, notwithstanding consecutive long weekends and favourable economic conditions. Recent data from the Australian Bureau of Statistics (ABS) illustrates a 0.1% increase in household spending, following declines and tepid growth in the preceding months. - read more

The Star Casino Faces AUSTRAC Penalties Over Money Laundering Breaches 06 Jun 2025: Paige Estritori The Star Casino is embroiled in legal difficulties after allegations emerged in a Federal Court involving their facilitation of risky financial transactions, including offering massive gambling credits to individuals known for money laundering. This follows financial watchdog AUSTRAC's pursuit of legal action against the casino. - read more

ASIC Intensifies Oversight on Private Credit Market 05 Jun 2025: Paige Estritori The Australian Securities and Investments Commission (ASIC) is fast-tracking its oversight of the private credit market, focusing on retail distribution amidst potential risks in the asset class. ASIC Commissioner Simone Constant disclosed that the regulator is prioritising this initiative in response to anticipated failures within the sector, as outlined in a discussion paper released earlier this year. - read more

Impact of International Students on Australian Economy Grows 05 Jun 2025: Paige Estritori The Australian Bureau of Statistics (ABS) recently highlighted the substantial contribution of international students to the economy, estimating education exports to be valued at $51 billion for the 2023-24 fiscal year. This figure underscores the economic significance of Australia's educational sector, as calculated by combining average spending estimates from Tourism Research Australia with students’ total course fee expenditures. - read more