ASIC's compliance playbook for private credit funds unpacked
Key takeaways
On 9 December, ASIC published a comprehensive catalogue of key legal obligations for private credit fund operators with the intention of strengthening compliance in Australia’s growing private credit market.
ASIC Reports 820–823, released in November, signalled a regulatory shift in the corporate regulator’s stance toward private credit. Fund operators of retail and wholesale private credit funds should pay close attention to the new catalogue of key obligations for private credit fund operators, including:
key AFS licensee obligations under the Corporations Act 2001 (Cth);
risk management obligations;
management of conflicts of interest;
fee and valuation transparency; and
key governance and responsible entity (RE) obligations for retail funds.
With rapid growth and increasing complexity in the private credit market, ASIC has stepped in with a clear message that compliance is not optional, it’s strategic.
ASIC’s catalogue of key legal obligations is more than a checklist; it’s a roadmap for fund operators navigating a market under heightened scrutiny.
Australia’s private credit market is no longer flying under the radar. ASIC has released a comprehensive catalogue of key legal obligations for private credit fund operators as part of its regulatory response to its concerns about inconsistent practices and heightened risks in the sector, identified through recent surveillance activities. Designed as a practical reference tool, the catalogue consolidates existing regulatory requirements and guidance, making it easier for operators to understand and meet their obligations.
The initiative forms part of ASIC’s broader capital markets roadmap, which aims to lift industry standards, enhance investor confidence, and maintain market integrity. Private credit has become an important complement to traditional banking, supporting innovation and economic growth. However, with rapid expansion comes increased scrutiny. ASIC has flagged areas of focus for future surveillance, including distribution practices, fee structures, margin arrangements, and conflict management, particularly for funds engaged in real estate lending.
Why the spotlight on private credit?
ASIC’s recent surveillance reports uncovered troubling inconsistencies in the private credit sector, particularly around distribution practices, fee structures, margin arrangements, and conflict management. These findings triggered a regulatory pivot: ASIC now wants stronger governance, better transparency, and robust risk controls across both retail and wholesale private credit funds.
Inside ASIC’s compliance playbook
The catalogue consolidates obligations under the Corporations Act 2001 (Cth) and ASIC’s Regulatory Guides, making it easier for operators to benchmark compliance. Here’s what stands out:
- AFS licensee duties (section 912A)
Operators must ensure services are delivered efficiently, honestly, and fairly, backed by adequate resources, competence, and risk management systems. - Conflict management
RG 181 Licensing: Managing conflicts of interest sets the tone: unmanaged conflicts are a deal-breaker. ASIC expects proactive frameworks, not reactive fixes. - Fee and valuation transparency
Clear, accurate disclosures are non-negotiable. Misleading or opaque practices risk enforcement action. - Governance and oversight for retail funds
REs must act in members’ best interests, maintain compliance plans, and ensure regular valuations. Design and distribution obligations (RG 274 Product design and distribution obligations) add another layer of accountability.
For wholesale funds, the emphasis is on risk frameworks, advertising standards, and valuation practices, while retail funds face additional disclosure and governance requirements under RG 45 Mortgage schemes: Improving disclosure for retail investors, RG 97 Disclosing fees and costs in PDSs and periodic statements, and RG 168 Product Disclosure Statements.
The road ahead
ASIC is not stopping here. Expect refreshed guidance in 2026-2027, shaped by ongoing surveillance and market trends. Operators who act now – by embedding ASIC’s principles into compliance frameworks – will not only mitigate regulatory risk but also position themselves as trusted players in a market where transparency equals competitive advantage.
The HW Funds team is well placed to assist with assessing your regulatory compliance. We are developing a regulatory compliance gap analysis to assist our private credit clients navigate this increased regulatory focus. More information will follow early in the New Year.
This article was prepared with the assistance of Patrick McMullin, Law Graduate.
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