ASIC Watch: 2026 Priorities Target Private Credit & Unlisted Asset Opacity

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This story features regulatory enforcement priorities affecting private credit providers, superannuation funds, asset managers, banks, and general insurers across both listed and unlisted sectors.

ASIC's 2026 enforcement agenda targets high-growth, opaque corners of Australia's financial system as $4trn in superannuation assets flows into private markets faster than governance frameworks can keep pace.

• Poor private credit practices elevated to a dedicated 2026 enforcement priority
• Financial reporting misconduct focuses on unlisted asset valuations across all funds
• Misleading pricing practices affecting cost of living under regulatory microscope
• Liquidity mismatch between illiquid loans and redemption terms threatens stability
• Enforcement extends beyond ASX-listed entities to the entire financial ecosystem

By Valery Prihartono

The Regulatory Map Shifts Toward Private Markets

ASIC’s 2026 enforcement priorities represent a direct response to structural shifts reshaping the Australian finance sector: sustained cost-of-living pressures and the blurring of the boundary between public and private markets.

ASIC Chair Joe Longo has stated explicitly the traditional separation between public and private markets is “no longer working”. The primary driver is rapid private market growth, largely fueled by Australia’s approximately $4trn in superannuation assets.

This structural change has introduced significant opacity and liquidity risk into the financial system, necessitating proactive regulatory intervention to protect retail investors’ savings, regardless of whether those assets are held in listed platforms or unlisted superannuation funds.

For investors, the implications extend beyond ASX-listed financial services companies. The risk profile of the entire financial ecosystem is repricing as ASIC targets vulnerabilities in unlisted sectors that can feed systemic instability back into public markets.

Private Credit: The Liquidity Mismatch Problem

ASIC has elevated “poor private credit practices” to a dedicated 2026 enforcement priority, signaling deep concern over structural risks in this rapidly expanding segment.

Private credit has experienced explosive growth as traditional banks retreated from higher-risk lending.

However, ASIC believes this growth has outpaced necessary governance frameworks.

ASIC’s Core Concerns:

Unknown Debt Levels: Risk of undisclosed debt accumulation and credit concentration, particularly in high-risk sectors like real estate. When lending occurs outside traditional banking channels, aggregate exposure becomes difficult to monitor and systemic risk harder to quantify.

Liquidity Mismatch: The critical vulnerability lays in structural misalignment. Private credit funds hold inherently illiquid loans –often with multi-year terms and limited secondary markets– yet distribute these through retail or semi-retail fund platforms offering relatively short redemption windows.

In stress scenarios, this mismatch could force asset fire sales at distressed prices or gate redemptions entirely, creating losses for investors and potential contagion across the financial system.

The Regulatory Response

ASIC has warned poor private credit practices are likely inconsistent with existing financial services law and will not hesitate to use enforcement tools immediately when misconduct is identified.

This isn’t a consultation period; it’s a compliance mandate affecting both listed asset managers and unlisted superannuation trustees offering private credit exposure.

Investment Implications Across the Sector

Private credit providers and platforms distributing these products must urgently invest in:

• Capital Structure Overhaul: Redemption terms must align with underlying asset liquidity. Funds offering monthly or quarterly redemptions on multi-year illiquid loans require restructuring

• Rigorous Stress Testing: Mandatory scenario analysis for redemption shocks, including modeling of gate triggers and implications for remaining investors

• Transparent Mechanisms: Clear disclosure of liquidity risks, redemption processes, and circumstances under which gates may be imposed

• Enhanced Monitoring: Systems to track concentration risk, leverage levels, and aggregate exposure across portfolios

For ASX-listed asset managers with material private credit exposure –including diversified fund managers and alternative investment platforms– this represents near-term earnings headwinds from elevated compliance spending.

The market has priced private credit growth as a positive earnings driver for alternative asset managers. ASIC’s priority suggests regulatory friction will slow that growth trajectory and materially increase the cost of funds management in this segment.

Unlisted superannuation funds offering private credit exposure through member investment options face identical compliance requirements, though market visibility of their remediation costs will be lower.

Unlisted Asset Valuations: The Transparency Imperative

The second major priority targets “Financial reporting misconduct including failure to lodge financial reports”, with explicit focus on entities holding unlisted assets.

The Valuation Challenge

Superannuation funds, unlisted property trusts, and large proprietary companies hold growing proportions of unlisted assets; private equity, unlisted property, private debt, and infrastructure investments. These assets lack the real-time pricing and liquidity of public markets.

This creates an inherent risk of subjective or misleading valuations that directly impact financial reporting reliability across the ecosystem. If valuations prove inflated during market stress, losses materialise suddenly rather than gradually, catching investors unprepared.

The elevation of this priority represents a direct regulatory response to opacity arising from public-private market convergence. Regulators globally have expressed concern unlisted asset valuations may not appropriately reflect market conditions, creating hidden vulnerabilities.

Beyond Listed Entities

Critically, this priority extends beyond ASX-listed companies. Unlisted superannuation funds holding material unlisted assets face identical scrutiny. Given that superannuation represents the majority of many Australians’ wealth, valuation reliability in unlisted funds carries systemic importance.

Investment Implications Across Fund Managers

This scrutiny requires immediate investment in enhanced internal valuation controls, translating to increased operating costs regardless of listing status:

• Rising Audit Costs: External assurance costs will rise across the sector, particularly for entities with material illiquid asset holdings. External valuation specialists will be engaged more frequently, the audit scope will expand, and documentation requirements will intensify.
• Governance Documentation: Enhanced governance surrounding valuation methodologies becomes mandatory. Funds relying on less rigorous “fair value” estimates for unlisted debt, property, or equity assets will face enforcement if misrepresentation is found.
• Independent Verification: Regular independent valuations from qualified external parties will shift from best practice to regulatory expectation. Internal valuations between independent assessments must be robustly supported and conservatively approached.
• Board Accountability: Non-executive directors on superannuation fund and asset manager boards face heightened personal accountability for valuation governance. Expect rising Directors & Officers insurance costs as this risk crystallizes.

For investors evaluating ASX-listed fund managers and platforms, the critical question becomes: what proportion of funds under management comprises unlisted assets requiring subjective valuation?

Higher proportions indicate greater regulatory scrutiny risk and compliance cost escalation. Platforms like Hub24 ((HUB)), Netwealth Group ((NWL)), and Praemium ((PPS)) primarily holding listed securities face minimal direct impact.

Diversified asset managers with significant alternatives exposure –particularly those managing superannuation money with material unlisted asset allocations– face the steepest cost increases and reputational risk if valuation practices prove inadequate.

Misleading Pricing: Consumer Protection Intensifies

ASIC has launched a dedicated enforcement priority on “misleading pricing practices impacting cost of living for Australians”.

This priority places all consumer-facing financial services institutions under intensive scrutiny; major listed banks, unlisted credit providers, general insurers, and consumer lending platforms.

The Regulatory Focus

The regulator will “zero in on misleading pricing practices… particularly those that make everyday costs harder for Australians”.

In the context of a sustained cost-of-living crisis, ASIC views opaque pricing as causing direct consumer harm requiring immediate enforcement response.

This extends beyond simple pricing errors to target intentionally complex fee structures, hidden costs, or practices misleading consumers about true comparative product costs.

Examples Likely to Attract Scrutiny:

• Complex fee structures obscure total costs across the product lifecycle

• Introductory rates reverting to materially higher standard rates without clear, prominent disclosure

• Penalty fees disproportionate to costs or inadequately disclosed upfront

• Insurance pricing varies significantly for identical coverage based on purchase channel or customer sophistication

• Credit product costs are difficult to compare due to structural complexity or bundled features

• Account fees are increasing through frequent small increments rather than transparent periodic reviews

Investment Implications for Consumer-Facing FSIs

Listed and unlisted consumer financial services institutions face two immediate requirements:

Pricing Transparency Investment: Institutions must dedicate capital to comprehensively auditing and simplifying pricing models. Any ambiguity around fees, penalties, introductory terms, or rate reversion must be eliminated. This represents material operational expenditure for organizations with complex legacy pricing structures.

Elevated Enforcement Risk: Action under this priority will likely be swift and public, resulting in civil penalties accompanying reputational damage. Risk is highest for companies where complexity appears designed to mask total product costs or prevent effective comparison.

For major banks –Commonwealth Bank ((CBA)), Westpac ((WBC)), ANZ Bank ((ANZ)), and National Australia Bank ((NAB))– the priority likely focuses on transaction account fees, credit card terms, and personal loan pricing structures.

For general insurers –Insurance Australia Group ((IAG)), Suncorp Group ((SUN)), and QBE Insurance ((QBE))– expect scrutiny of premium calculation transparency, particularly factors affecting pricing and how effectively these are disclosed to consumers at the point of sale.

Consumer credit providers, including buy-now-pay-later operators, face examination of fee structures, particularly penalty and late payment fees that may be inadequately disclosed or disproportionate to actual costs incurred.

Compliance Quality Becomes Competitive Moat

The 2026 enforcement priorities confirm ASIC is acting proactively to contain risk before market destabilisation.

The focus on private credit, unlisted asset valuations, and misleading pricing signals governance failure in high-growth, opaque segments will meet immediate enforcement.

Strategic Positioning for Investors

The regulatory shift creates clear differentiation opportunities across financial services:

Favour Transparency and Simplicity

Companies with straightforward pricing, robust valuation governance, and minimal private market opacity will command valuation premiums as compliance costs escalate for competitors with complex structures.

In private credit and alternatives, favour managers demonstrating:

• Clear, documented valuation policies utilising independent third parties are regular

• Transparent liquidity management with redemption terms appropriately matching underlying asset liquidity profiles

• Strong historical track records of financial reporting quality and regulatory compliance

• Conservative approaches to leverage deployment and concentration risk management

Discount Opacity and Structural Complexity

Asset managers and platforms with high proportions of subjectively valued unlisted assets face material cost increases and potential remediation expenses.

Apply structural discounts to businesses where:

• Valuation methodologies lack independence, transparency, or regular external validation

• Liquidity terms appear mismatched with underlying asset characteristics, particularly short redemption windows on illiquid holdings

• Pricing structures are complex, difficult for consumers to compare, or feature frequent small adjustments rather than transparent periodic reviews

• Historical track record includes regulatory interventions, reporting issues, or valuation controversies

Monitor Compliance Spending Trends

Watch for material increases in compliance, audit, and external assurance costs in financial services company disclosures. These provide early warning signals for companies with governance vulnerabilities requiring remediation.

Year-on-year increases significantly exceeding inflation indicate either proactive strengthening of frameworks (positive if implemented early) or reactive catch-up spending (negative if lagging peers or following regulatory contact).

Enforcement Velocity and Investment Timing

ASIC’s stated intent to act swiftly and use enforcement tools immediately means the window for mitigating these risks is compressed. Market participants should treat these priorities as immediate regulatory mandates rather than future possibilities requiring monitoring.

The traditional approach of waiting for specific guidance, consultation papers, or test cases before acting won’t work in this cycle. ASIC has signaled it will enforce first and establish precedents through action rather than extended consultation.

Implications for Investment Positioning:

• Compressed Remediation Timelines: Companies that haven’t begun addressing these priorities face compressed implementation windows, likely requiring more expensive crash programs rather than orderly phased approaches. This typically involves external consultants, rushed system changes, and operational disruption — all materialising as near-term margin pressure.
• Elevated Headline Risk: The probability of enforcement actions generating material negative headlines over the next 12-18 months is high. Position portfolios defensively in segments with obvious vulnerabilities, particularly asset managers with significant private credit or unlisted asset exposure and consumer FSIs with historically complex pricing.
• Flight to Quality Dynamics: As enforcement actions materialise, investors will likely favour companies demonstrating robust governance frameworks, creating valuation divergence between leaders and laggards beyond what fundamentals alone would justify.

Investment Strategy Summary

The 2026 priorities demand re-assessment of governance risk across financial services portfolios, extending beyond traditional ASX-listed company analysis:

• Private Credit Exposure: Any asset manager –listed or unlisted– with material private credit funds requires detailed analysis of liquidity terms, stress testing capabilities, and redemption mechanisms. Regulatory intervention risk is materially elevated. For listed companies, quantify private credit as a percentage of total FUM and assess liquidity structure transparency in product disclosure statements.
• Unlisted Asset Valuations: Platforms and managers with high proportions of unlisted assets face cost increases from enhanced valuation governance requirements. Quantify this exposure and stress test earnings for compliance cost escalation of 15-25% in affected business lines. Independent valuation frequency and methodology disclosure quality provide insight into current framework robustness.
• Consumer Pricing Complexity: Banks, insurers, and credit providers with complex fee structures or pricing opacity face enforcement risk. Simple, transparent pricing models will command valuation premiums as regulatory pressure intensifies. Review product disclosure statements and fee schedules for complexity — if comparison across providers proves difficult, regulatory risk is elevated.
• Compliance Framework Quality: The new regulatory frontier forces structural increases in defensive compliance spending across financial services. Companies with established, well-documented governance frameworks gain competitive advantages over those requiring expensive catch-up investment. Board experience in regulatory matters and historical compliance track records provide useful signals.   
• Superannuation Fund Considerations: For Australians with superannuation holdings, consider fund exposure to private credit and unlisted assets when evaluating MySuper and investment options. Higher exposures may deliver returns but carry increased valuation uncertainty and liquidity risk under stress scenarios. Funds with transparent valuation policies and conservative liquidity management deserve preference.

The Regulatory Risk Repricing

The regulatory risk premium across financial services is repricing toward private markets and consumer-facing businesses. This repricing will occur gradually as enforcement actions materialise and market participants adjust expectations.

Investors positioning ahead of this enforcement cycle can avoid negative surprises and potentially benefit from flight-to-quality dynamics as weaker competitors face intervention. The opportunity lays in identifying governance leaders before premium valuations fully reflect their relative strength.

ASIC has provided clear advance notice of enforcement priorities; an unusual luxury in regulatory cycles. The window for proactive positioning remains open but is narrowing as the 2026 calendar year approaches.

Companies that have treated these priorities as vague future concerns rather than immediate mandates will face compressed remediation timelines and elevated costs.

Those that began strengthening frameworks upon ASIC’s announcement gain first-mover advantages in avoiding disruption and demonstrating leadership to investors and regulators.

The 2026 enforcement agenda is live. The starting pistol has fired, and the race to strengthen governance frameworks before enforcement actions materialise is underway.

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