ASIC warns private credit firms of enforcement action over poor practices

Simone Constant: Simone Constant is a commissioner at the Australian Securities and Investments Commission. She delivered a speech in Sydney highlighting risks in the private credit sector and stating that the regulator is moving beyond warnings toward enforcement. Constant referenced the recent collapse of property developer Bathla as an example of why strong governance and accurate valuations are needed. Australian Securities and Investments Commission: The Australian Securities and Investments Commission (ASIC) is Australia's corporate, markets and financial services regulator. In this news, ASIC has warned private credit firms about unrealistic valuations, opaque fees and other poor practices, signaling that enforcement action is likely if standards do not improve. Commissioner Simone Constant delivered the warning in a speech, noting the sector's rapid growth has outpaced industry standards. Regulation: Australia's corporate regulator has stepped up scrutiny of the private credit industry over the past 18 months and is now preparing for enforcement action on issues including valuations, liquidity and governance. Market Exposure: Australia's private credit sector is heavily exposed to real estate lending, leaving it vulnerable to inflation, cost increases, project delays and unrealistic asset valuations.