Arabic version: هيئة ASIC تحذّر قطاع الائتمان الخاص بشأن معايير الإقراض
According to ABC News, ASIC commissioner Simone Constant will tell a Sydney gathering that the “clock is ticking” on whether Australia faces broader credit stress. The regulator has warned private credit funds that it is now beyond warnings and that the sector should prepare for enforcement action.
Private credit refers to lending outside the banking sector. ASIC says the domestic market has grown by an estimated 500 per cent over the past decade, while governance, controls and underwriting standards have not kept pace. Constant said the collapse of NSW property developer Bathla underscored the importance of governance, oversight, disclosure and accurate valuations. CVS Lane First Mortgage Fund and CVS Lane Property Finance Fund had exposure to Bathla through nine loans.
ASIC’s review of 28 funds found only four published information on interest rates or ranges charged to borrowers. Less than half had detailed written policies for credit, impairment and default management. Most lacked adequate separation between loan approval and independent assessment of loan performance and value, while only two wholesale funds used stress testing in liquidity risk management.
The regulator also found Australia trailed comparable jurisdictions including Singapore, the United States, the United Kingdom and Switzerland on private-market information and disclosure. Constant has challenged the industry to lift standards by 2027, which she said was three months away, and urged funds to assess themselves against ASIC’s ten principles for private credit done well.
Investor concerns have also focused on redemptions. Morgan Stanley again curbed withdrawals from its nearly $US7 billion private credit fund in the third quarter after investors sought more than twice the amount it was prepared to repurchase. FinCap executive chairman Christian Ryan said contagion or a broad, rapid withdrawal of money from Australia’s sector was “possible”, though he said many funds were well run. Reserve Bank governor Michele Bullock said risks appeared contained and any weakening of standards would primarily affect investors in those funds rather than create a systemic issue.
