ASIC has warned that practices across the $200 billion private credit market are inconsistent and, in some cases, require serious improvement.
In a speech delivered to FINSIA’s The Regulators event in Sydney, commissioner Simone Constant said the early indications from ASIC’s upcoming surveillance report, due for release in November, show that “practices in the private credit funds management sector vary”.
“They’re not consistent. There are some good practices, but some areas for serious improvement,” Constant said.
The report, she said, will be released alongside a “comprehensive public and private markets report and roadmap”, which comes off the back of ASIC’s February discussion paper on evolving capital markets and the consultation with industry participants.
Constant said this work will help ensure Australia remains an attractive investment destination.
“At that time, you can expect further proposals from ASIC with a view to ensuring Australia is an attractive investment destination while also, of course, providing appropriate protections.”
Her comments follow ASIC chair Joe Longo’s declaration in the regulator’s 2025–26 corporate plan that the agency is “not a passive observer” and will not adopt a “wait and see” approach as private markets expand.
“We have a window of opportunity now to influence the design of public and private markets to support Australia’s needs, not just for tomorrow but for the next five to 10 years,” Longo said.
Private markets, including private credit, have grown rapidly over the past decade, with assets under management increasing more than 160 per cent. Superannuation funds are a key driver of this growth, with APRA-regulated funds now broadly equal to the market capitalisation of the ASX itself.
Constant in her speech revealed that ASIC’s February discussion paper received around 100 submissions from a wide range of industry sectors, with a consistent message that public and private markets should complement, not cannibalise, each other.
The regulator, she said, has already acted on several recommendations, including clearing the path for faster initial public offerings.
“We have cleared the path for faster initial public offerings. We are in the process of expanding our approved foreign markets, further integrating Australia into the global financial system. And we have started exploring measures to streamline the dual listing of foreign companies,” Constant said.
“In the next three months you’ll hear more from ASIC on this front.”
This, she said, will include an “expert report” on the state of the estimated $200 billion private credit sector.
“This is assisting us to better understand current disclosure, distribution, conflicts of interest, valuation, conduct practices and use of ratings in the sector.”
The timings of ASIC’s releases aren’t immediately clear. ASIC had earlier indicated it is preparing a progress report on private credit this month, ahead of the overall November release.
A draft report, seen by some market participants last month, reportedly highlighted both good and bad practices and was well received.
ASIC has flagged that its survey of private credit managers would focus on governance, valuation, liquidity, conflicts of interest, fees, disclosure, and distribution. The regulator said the outcomes will remind operators that existing laws already apply, and that it is prepared to take providers to court if rules are breached.
The regulator is also understood to be working on updated guidance and advocating law reform to improve transparency and data standards in line with international markets.
