Australia’s corporate regulator is threatening more aggressive legal action against private credit funds th
t fail to protect investors, as the A$200 billion ($131 billion) industry continues to expand.
The Australian Securities & Investment Commission’s deputy chair, Sarah Court, will announce pl
ans to step up enforcement against poor private credit practices a
s part of its priorities for 2026, according to a press release Thursday. ASIC also said it will target misleading pr
icing practices by banks, insurance firms and pension fund trustees.
“This new enforcement priority should send a message to the rapidly expanding private credit sector to get its
governance right,” sai
d Court at the ASIC annual forum in Melbourne on Thursday. “It comes on the back of our recent private credit fund s
urveillance report that highlights significant room for improvement.”
The heightened scrutiny of Australia’s private credit sector follows high-profile collapses in the US, including
auto loan financier Tricolor
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Holdings to auto parts supplier First Brands. Their rapid demise has
raised concerns about financiers’ exposure to other problem companies.
A recent ASIC surveillance report of some of Australia’s largest private credit managers highlighted poo
r reporting, fee and margin practices. “There are some things that ar
e really not being done well and we’re really worried,” said Sim
one Constant, ASIC commissioner at the same event. “That’s why
we have absolutely put our back into the private credit space.”
The regulator also issued interim stop orders against some inve
stment products of La Trobe Financial Asset Management Ltd. and
RELI Capital Ltd. over concerns about their suitability for retail investors.
Photograph: Hamish Hansford, head of national security at Department of Home Affairs, during the Australian Sec
urities and Investments Commission (ASIC) Summit in Melbour
ne, Australia, on Wednesday, Nov. 12, 2025; photo credit: Carla Gottgens/Bloomberg