Australian Securities & Investments Commission issues interim DDO stop orders on La Trobe Australian Credit Fund term account products

The Australian Securities & Investments Commission (ASIC) has made interim stop orders under the design and distribution obligations (DDO) against the 12 Month Term Account and 2 Year Account products offered under the La Trobe Australian Credit Fund, citing deficiencies in the target market determination (TMD) for both products. The orders prevent La Trobe Financial Asset Management Limited from dealing in interests, issuing a product disclosure statement for, or providing general financial product advice to retail clients recommending an investment in the two products. ASIC is concerned the products’ stated target markets suggest an inappropriate level of portfolio allocation given the fund’s risks and do not include appropriate distribution conditions. The stop order referral followed ASIC’s retail private credit surveillance focusing on fund transparency, governance, valuation practices, management of conflicts of interest and fair treatment of investors. The accounts are invested almost entirely in loans secured by registered first mortgages, are not bank deposits, and have non-guaranteed returns and conditions around withdrawals; the product disclosure statement reported AUD 11,605 million in assets under management at 30 September 2024. The interim stop orders are valid for 21 days unless revoked earlier.