Australia’s corporate regulator has declined to comment on a report it is targeting secret fees and conflicts of interest in a survey of participants in the private credit industry.
The Australian Securities and Investments Commission (ASIC) said it had no response to an article in The Australian newspaper that reported ASIC was demanding that operators “come clean” on these arrangements.
“As noted in the story, ASIC did not provide a copy of the survey to The Australian and as such we have no further comment in relation to the below,” an ASIC spokesperson told Azzet.
The Australian reported that ASIC’s survey was concentrating on fees charged and worries that “managers may otherwise be ‘extracting value’ from their role in a way that is difficult for investors to monitor”.
ASIC warned private credit managers that it would look at “undisclosed asset-level fees to related parties” such as placement or origination fees, related party brokerage arrangements, and interest and margin sharing deals, the newspaper wrote.
“Under the current regulatory framework, we would not consider these charges to necessarily be problematic for wholesale managers, provided that there are appropriate conflicts of interest and consent arrangements in place,” ASIC said in the survey.
The survey is aimed at obtaining feedback about a discussion paper it published in February: Australia’s evolving capital markets: A discussion paper on the dynamics between public and private markets.
In releasing the discussion paper the corporate regulator expressed concern about the rise of private markets as the number of publicly traded companies fell and it explored the influence of Australia’s $4.2 trillion superannuation industry on markets.
Feedback is to be provided by 5pm on 28 April 2025 but ASIC did not comment on the steps it would take subsequently.
