Australia’s corporate regulator is threatening more aggressive legal action against private credit funds that 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 plans to step up enforcement against poor private credit practices as part of its priorities for 2026, according to a press release Thursday. ASIC also said it will target misleading pricing 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,” said Court at the ASIC annual forum in Melbourne on Thursday. “It comes on the back of our recent private credit fund surveillance 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 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 poor reporting, fee and margin practices. “There are some things that are really not being done well and we’re really worried,” said Simone 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 investment 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 Securities and Investments Commission (ASIC) Summit in Melbourne, Australia, on Wednesday, Nov. 12, 2025; photo credit: Carla Gottgens/Bloomberg
Related:
- Bain Capital Private Credit Executive Brushes off Systemic Concerns, Eyes Asia Growth
- Global Funds Add to Warnings of Risks in Private Credit
- UBS Warns of Systemic Risk From Weak US Insurance Regulation
- Private Credit Could Amplify Shock in Next Crisis, Fitch Says
Topics Australia
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