ASIC flags concerns in private credit sector amid market growth

Australian Securities and Investments Commission (ASIC) Chair Joe Longo has expressed support for the expanding role of private markets but warned of problematic practices, particularly in the private credit space. Speaking at an American Chamber of Commerce event in Sydney, Longo emphasized that while ASIC doesn’t steer investors toward specific asset classes, it remains vigilant about transparency and fair practices.
“We’re noticing some troubling behaviours in private credit,” Longo said. “One issue is the calculation of fees based on the carrying value of loans that may not be performing. This can give a misleading picture of a fund’s actual worth. There’s also a lack of consistency in valuation practices—some funds are engaging independent experts, while others are not.”
Despite these concerns, Longo indicated that ASIC has no immediate plans to introduce new regulations. Instead, the agency aims to foster a confident and informed investor base in these growing markets.
“I’m often asked why ASIC is looking into these matters,” Longo said. “But it’s our responsibility. These investments involve superannuation funds, insurance, and shareholders’ money. Transparency and accountability are crucial. We should be proactive, not reactive—ensuring investors know the risks and make informed decisions.”
His comments come shortly after ASIC Commissioner Simone Constant highlighted an increased focus on private credit at the Investment Magazine Fiduciary Investors Symposium. Constant acknowledged the benefits of private credit for both borrowers and investors but emphasised the need for stronger oversight.
“There’s little appetite for heavier regulation, but there’s recognition that more supervision is necessary,” she noted.
“This includes better asset valuation, conflict-of-interest management, fee and risk disclosures, and ensuring all investors are treated fairly. There’s also interest in ASIC providing clearer guidance on best practices.”
ASIC had also released more than 50 public submissions received in response to its discussion paper on the evolving dynamics between public and private markets, released in February 2025.
Industry feedback was mixed on whether the decline in initial public offerings (IPOs) and listed companies was structural or cyclical, with most accepting some structural elements.
Most recognised the growth in private markets as a significant and structural global trend. While this growth was recognised as a positive trend, signalling investor confidence in the existing regulatory framework, there was also feedback that many companies choose to remain or go private over listing for longer term growth opportunities.
Superannuation trustees also under scrutiny
Longo also discussed ASIC’s broader efforts to improve services for superannuation fund members, including a recent review of how major funds handle death benefit claims. The findings revealed significant gaps in performance tracking and internal monitoring.
“Not one trustee we examined tracked the full end-to-end time it took to process death benefit claims,” he said. “Many didn’t even know how long claims were remaining open. If they had acted on this data, they might not be under threat of enforcement action now.”
He called on trustees to take ownership of their internal systems and processes, stressing that good governance and proper data management are essential. ASIC supports the federal government’s proposed mandatory service standards aimed at raising trustee performance.
Looking ahead, Longo said ASIC’s next priority will be investigating how trustee boards respond to customer complaints, a critical feedback mechanism.
“No business can succeed without understanding its customers,” he said. “Complaints are a vital tool for gauging performance and managing risk. Trustees who ignore this are not only failing their members but also breaching their legal responsibilities.”
He reminded the industry that analysing complaint data to detect systemic issues is already a legal obligation—and warned that failures in this area could trigger regulatory enforcement.
Private Credit, Public Trust: The Regulatory Crossroads is Here. Are You Ready?
The private credit market is growing rapidly—but not without concern. ASIC Chair Joe Longo recently raised red flags around troubling practices in the sector, including inconsistent valuation methods and fees tied to underperforming assets. While ASIC has no plans for new regulations just yet, Longo made it clear: transparency, accountability, and investor protection must keep pace with market innovation.
His remarks come as ASIC intensifies its focus on private market risks, superannuation governance, and the obligations of trustees to act swiftly and ethically in areas like complaints handling and death benefit claims. It’s a reminder that regulatory attention is shifting—and institutions must be ready to respond.
These issues, and the broader transformation of Australia’s regulatory landscape, are set to take centre stage at FINSIA’s The Regulators 2025—a flagship event bringing together the country’s most influential regulatory leaders:
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Therese McCarthy Hockey, Executive Board Member, APRA
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Dr. Brad Jones, Assistant Governor (Financial System), RBA
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Kate O’Rourke, Commissioner, ASIC
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Brendan Thomas, CEO, AUSTRAC
This year’s event will explore what’s next for the financial services sector, focusing on the intersection of innovation, risk, compliance, and trust in an evolving global environment. With private markets continuing to grow, and scrutiny around governance and disclosure intensifying, this is a vital opportunity to hear directly from the regulators shaping 2025 and beyond.
Whether you’re steering policy, overseeing compliance, or managing stakeholder risk, The Regulators 2025 will provide the insights and foresight needed to lead with confidence in an increasingly complex financial ecosystem.
Now is the time to engage. Now is the time to prepare. Register now for The Regulators 2025.