Australia’s corporate watchdog has urged the private credit industry to tighten standards after an expert review highlighted uneven practices across the fast‑growing market.
In a progress update on public and private markets, ASIC said a sector review by infrastructure investor Richard Timbs and former banker and chief risk officer Nigel Williams informed Report 814 on private credit. The paper sketches the current shape and scale of the asset class in Australia and sets out examples of both robust and weak conduct.
ASIC wants industry bodies to develop standards that mirror leading global frameworks, warning that growth has outpaced discipline in areas such as how managers are paid and charge fees, conflicts arising from related‑party activity, governance, valuation methods and the inconsistent use of terminology that can muddy disclosure.
“Private credit is playing an important role in our capital markets and Australia should implement industry standards that align with international best practice,” ASIC chair Joe Longo said.
“Enhanced standards are needed to lift practices across the sector. They will help promote confidence, improve market integrity and empower investors to make informed decisions.”
ASIC said the findings line up with early results from its retail and wholesale surveillance work. In recent weeks, the regulator has issued stop orders under the design and distribution obligations regime against RELI Capital Mortgage Fund, La Trobe’s US Private Credit Fund and La Trobe’s Australian Credit Fund.
While the review notes examples of sound practice and argues that, done well, private credit can complement bank lending and support innovation and jobs, ASIC stressed that parts of the market are falling short of existing law.
“ASIC expects meaningful action in response to these findings and will not hesitate to intervene where progress falls short,” Mr Longo said. The regulator estimates the domestic private credit market is now about $200 billion and expanding quickly.
The update builds on ASIC’s discussion paper on the interplay between public and private markets, which drew more than 90 submissions from issuers, investors and advisers. In parallel, ASIC has moved to streamline initial public offerings and taken steps aimed at boosting competition, innovation and Australia’s appeal to overseas capital.
ASIC plans to publish its formal response to the discussion paper in November, alongside further surveillance findings. That package will set out core principles, additional research and expert input to guide the regulator’s future priorities, work programme and regulatory roadmap.
