Australian Securities & Investments Commission issues 21-day interim DDO stop order on RELI Capital Mortgage Fund

The Australian Securities & Investments Commission (ASIC) has made an interim stop order under the design and distribution obligations (DDO) against the RELI Capital Mortgage Fund, a registered managed investment scheme operated by RELI Capital Limited, aiming to prevent consumers and retail investors from acquiring a product that may not suit their objectives, situation or needs. The order prevents RELI Capital from dealing in interests in the fund, issuing a product disclosure statement for the fund, or providing general financial product advice to retail clients recommending an investment in the fund. ASIC’s concerns relate to the fund’s target market determination (TMD), including that the target market potentially captures investors intending to hold the fund as a ‘Core Component’ (25–75%) of their portfolio, the fund’s stated “Risk level 3 (Low to Medium)” is an incomplete measure of risk, the TMD indicates suitability for investors seeking capital preservation, and the TMD specifies no distribution conditions. The stop order referral arose from ASIC’s retail private credit surveillance, which examined transparency, governance, valuation practices, conflicts management and fair treatment of investors; the fund had net assets under management of AUD 50.9 million as at 31 December 2024. The interim stop order remains in force for 21 days unless revoked earlier, and ASIC recommended that existing investors review whether the fund remains suitable for their financial objectives, situation or needs.