Many investors are still not being given the information they need to properly understand the risks, fees and conflicts present in private credit investments as complex structures, opacity and deficient disclosure practices persist, ASIC’s second major surveillance of private credit has found.

Between November 2025 and August 2026, ASIC reviewed 24 wholesale and retail private credit funds responsible for a combined $18 billion in assets under management, as well as a sample of financial advice given to retail investors relating to private credit.

ASIC’s surveillance found that many of the poor fee, disclosure, distribution and conflict-management practices identified in ASIC’s first private credit report, released in November 2025, remain.

The findings, outlined in ASIC’s new report (REP 846), have also led to several regulatory interventions, including six interim stop orders and multiple referrals for further enforcement investigation.

ASIC Commissioner Simone Constant said, ‘Private credit plays a growing role in the Australian economy. The fact that ASIC has issued six interim stop orders since September this year is clear evidence that practices have still not improved in line with this growth.

‘While we have observed pockets of improvement, complexity and opacity persist, in some cases leaving investors unable to properly assess the risks and benefits of their investments. ASIC has made clear what good practice looks like by providing industry with significant guidance, including our ten principles of private credit done well. Our focus now will be on holding the sector accountable for persistent poor practices.

‘Investors should not need forensic skills to understand how a fund operates. They provide the capital and they bear the risk – they are entitled to understand how their money is being used, how risks and conflicts are managed, and whether decisions are made in their interests. When structures get so complex that in some pockets of private credit we have seen more special purpose vehicles within a group than employees to manage investors’ money, effective disclosure of risks to the investors becomes near impossible.’

ASIC's latest surveillance observed:

• Complex structures and arrangements that masked conflicts and fees, including related-party arrangements, managed in ways that may not have supported fair investor outcomes,
• Incomplete or inconsistent fee disclosure, including which fees were retained by fund managers, with only two of 22 funds passing on the full economic benefits of interest earned and borrower fees to investors, and
• Retail distribution practices that failed to clearly communicate risks and support informed decision making, including nine of 12 retail funds failing to clearly explain key information for investor decision making, such as non-performing or distressed assets.

ASIC's surveillance also found that, while most of the financial advice reviewed demonstrated compliance with legal obligations, advisers who recommended higher portfolio concentration to a single private credit fund were less likely to demonstrate compliance with their duty to act in the investor’s best interest. Related party dealings and potential for conflicting interests were, again, warning signs of higher risk of poor conduct and outcomes.

Commissioner Constant continued, ‘Private credit is no longer an asset class confined to institutional investors or high-net-worth individuals. As more Australians are exposed through retail channels and superannuation, strong gatekeepers matter more than ever.

'ASIC is encouraged by some industry efforts to lift practices and develop standards. What matters now is that those standards are adopted and embedded across the sector.

‘It is past time for the sector to embrace its role as good stewards of other people’s money, which means being clear and transparent about risks, fees and conflicts. It is time now for urgent action from all involved in the private credit system.’

ASIC’s surveillance at a glance

Download

• Report 846: Private Credit Funds: Do investors know what they are getting? (REP 846)

Background

ASIC’s enforcement actions relating to private credit funds

Poor practices in private credit is a 2026 enforcement priority. ASIC has several well-progressed enforcement investigations underway, and this surveillance has resulted in numerous enforcement referrals and interim stop orders, including:

• Fidante Partners Limited (26-241MR)
• Australian Secure Capital Fund (26-234MR)
• Melbourne Securities Corporation Limited (3 stop orders) (26-225MR)
• Murdoch Clarke Mortgage Management Ltd (26-257MR)

These stop orders were lifted once the issues identified by ASIC were promptly addressed.

ASIC’s private credit focus

ASIC’s private credit work forms part of its multi‑year capital markets roadmap, covering supervision, refreshed regulatory guidance, law reform and enforcement across Australia’s public and private markets (25-264MR).

The roadmap draws on ASIC’s 2025 private credit surveillance (REP 820), which identified gaps in governance, valuation, disclosure, and conflicts management.

In addition to this work, ASIC has:

• released its ten private credit principles within REP 823,
• issued a catalogue of key legal obligations for private credit funds (News Item),
• updated Regulatory Guide 181 AFS licensing: Managing conflicts of interest (RG 181),
• observed some improvement in private credit fund practices after conducting a voluntary industry survey (News Item), and
• updated Moneysmart's guidance on private credit to help consumers understand how private credit investments work, which type of investor they suit and what to check before directly investing.

ASIC’s upcoming work in private markets and private credit includes:

• plans to refresh existing Regulatory Guides for managed funds, to reflect additional requirements in relation to funds with a private credit strategy, and
• further engagement with industry bodies on stronger standards across retail and wholesale funds. This also encompasses the broader private credit sector, including responsible entities, wholesale trustees, investment managers, distributors, financial advisers, valuers, and auditors.