The Australian Securities & Investments Commission (ASIC) published a progress update on its work to advance Australia’s public and private markets, drawing on feedback to its February discussion paper and subsequent industry engagement. The update centres on the rapid expansion of private markets, particularly private credit, and sets out ASIC’s current surveillance and enforcement activity alongside planned guidance, while also summarising steps already taken and options under consideration to support the attractiveness of listed public markets. On private credit, ASIC points to commissioned research in Report 814, which estimates the sector at around A$200 billion and highlights that roughly half is invested in real estate related assets, with significant exposure to higher risk construction and development and a concentration of less experienced investors. The report and early surveillance findings identify better practices to lift confidence and integrity, including regular reporting of fund composition, independent loan valuations, clearer disclosure on ratings use, mezzanine and equity holdings, manager fees and earnings, and liquidity risk management and leverage, as well as transparency and independent review of related party transactions and consistent terminology. ASIC also flags concerning practices requiring regulatory focus, including fee structures that may misalign manager and investor interests, governance and conflicts in related party dealings and inter fund transfers, valuation independence and impairment recognition, liquidity mismatch risks and inconsistent reporting. ASIC states it has already issued stop orders on several target market determinations for retail private credit funds due to poor disclosure and distribution and has commenced enforcement investigations for more egregious conduct; it also expects to complete an update to its conflicts management guidance, including proposed updates to Regulatory Guide 181 with new private market examples, by the end of 2025. Next steps include a package of publications in November covering private credit surveillance findings across retail and wholesale funds, examples of better and poorer practices and areas for action, and guiding disclosure and conduct principles for compliant private credit, alongside two expert reports on the future state of Australia’s capital markets and international approaches to data reporting and transparency in private markets. ASIC also plans to release an ASIC report synthesising discussion paper feedback and its forward roadmap, and a funds management regulatory guidance catalogue, and to provide a further November update on public market initiatives, following earlier changes to the initial public offering process and work on competition and an inquiry into Australian Securities Exchange group governance, capability and risk management.
Australian Securities & Investments Commission 2025-09-22
Australian Securities & Investments Commission outlines private credit standards agenda and public market reforms in capital markets progress update
The Australian Securities & Investments Commission (ASIC) updated on efforts to enhance Australia's markets, focusing on private markets' growth, especially private credit. ASIC's update covers surveillance, enforcement, guidance, and public market attractiveness. Concerns include fee structures, governance, valuation independence, and liquidity risks, with ASIC issuing stop orders and investigations. Upcoming publications will address private credit practices, disclosure principles, and capital market strategies.