(4 June 2025 – Australia) The Australian corporate regulator is facing a growing push to regulate private markets more strictly as major market participants voice their concerns over retail investor access, especially for private credit.
While the regulatory framework across private markets is broadly viewed as fit for purpose according to Australian Securities & Investments Commission (ASIC) canvassing of 50 key stakeholders, there is scope for targeted uplift and for more active and ongoing monitoring and supervision in wholesale and retail private markets.
Key stakeholders are advocating for increased supervision of private credit markets “due to its opacity, rapid growth, and untested status in a downturn.”
The growing private credit market is viewed as a positive by Westpac as it allowed the bank to distribute risk to other lenders, avoiding the historical challenges the bank encountered when it over leveraged on commercial real estate (CRE). Westpac Institutional Bank Chief Executive Nell Hutton backed the ASIC’s reviews of private credit and unlisted assets, asserting there is a need for appropriate oversight and transparency on valuations.
“Private credit funds can be great partners for us in distributing risk; I think they play an important role in the ecosystem. That’s not going to go away” Ms Hutton stated.
“ASIC wants both public and private markets to thrive and flourish – together, they drive more investment, more opportunities for companies to grow, and more jobs for Australians. I was encouraged by the breadth and richness of the responses we received, which recognised this is a timely discussion that will shape the future of Australia’s capital markets. We heard our markets are strong but changing, and that public and private markets must complement, not cannibalise each other” commented ASIC Chair Joe Longo.
“The increasing exposure of retail investors to private credit markets was also called out for closer examination following concerns for potential non-investment risk-driven losses, for example through illiquidity, conflicts of interest and opaque fees. This will be supplemented by insights from industry experts to inform the actions the agency will take to maintain integrity, protect investors and promote the quality of Australia’s private credit industry” ASIC said in a statement.
ASIC will announce which suggestions will be adopted and share its roadmaps for public and private markets in H2 2025.