The Australian Securities & Investments Commission (ASIC) set out two enforcement priorities focused on reducing investor harm: holding those responsible for the Shield and First Guardian Master Funds collapses to account and cracking down on poor practices in private credit, particularly where disclosure and distribution fall short. On Shield and First Guardian, ASIC cited more than 11,000 investors impacted and close to AUD 1 billion of retirement savings put at risk, with investors encouraged to switch superannuation into higher-risk investments. ASIC’s response has included stop orders, asset-freezing orders, applications for receivers and liquidators, travel restraint orders, licence cancellations and adviser bans. Proceedings have been commenced against Macquarie, Equity Trustees, Interprac Financial Planning and SQM Research, with ASIC describing its case against SQM Research as its first action against a research house, alleging misleading representations and processes falling short of expected standards. ASIC is also seeking leave to commence proceedings against MWL Financial Services, a former MWL director and Imperial Capital Group for an alleged scheme that resulted in hundreds of clients investing superannuation into Shield, bringing matters to 10 Federal Court proceedings against 18 defendants. The speech also pointed to possible regulatory gaps across the investment chain, including the regulation of lead generators, the super switching process, obligations of super trustees offering platform products and the regulation of managed investment schemes. On private credit, ASIC referenced an estimate valuing the Australian market at more than AUD 200 billion and 500% growth over 10 years, alongside concerns about limited transparency and concentrated exposure to property lending. Building on its surveillance of 28 retail and wholesale private credit funds, ASIC highlighted inconsistencies in terminology, limited disclosure of borrower interest rates and fees, and weak valuation practices in some open-ended funds, and reiterated it has already issued stop orders on several target market determinations and one product disclosure statement. ASIC announced a second surveillance phase focusing, for retail funds, on fee and margin disclosure and distribution to retail investors through advisers, and for wholesale funds, on fees, margin structures and conflicts of interest with a focus on real estate lending.
Australian Securities & Investments Commission 2025-12-02
Australian Securities & Investments Commission outlines court-led action on the Shield and First Guardian collapses and launches a second phase of private credit surveillance
The Australian Securities & Investments Commission (ASIC) outlined enforcement priorities to mitigate investor harm, focusing on accountability for the Shield and First Guardian Master Funds collapses and addressing poor practices in private credit. ASIC has initiated legal actions against entities like Macquarie and SQM Research, highlighting regulatory gaps in the investment chain. In private credit, ASIC noted rapid market growth and transparency concerns, announcing further surveillance on fee disclosure and distribution practices.