The Broker Times · Regulatory Brief
28 Funds Reviewed. 4 Published Their Borrower Rates.
ASIC Commissioner Simone Constant told a room of commercial and asset finance brokers that the private credit sector is past the warning stage. The surveillance behind that statement is a ready-made diligence list.
What the surveillance of 28 funds found
As reported by The Adviser, 23 September 2026. Sector-level findings, not findings against any individual fund.
How the regulator got here
The sequence is the signal.
- June 2026ASIC requires asset valuations to be refreshed, warning that managers avoiding write-downs face direct regulatory attention.
- 22 September 2026Commissioner Simone Constant tells the CAFBA commercial property and development finance summit the sector is “beyond warnings” and should prepare for enforcement action.
Why it lands on the broker’s desk
The audience was brokers
This was said at a commercial and asset finance brokers’ summit, not an investor conference. That choice indicates where the regulator expects questions to be asked.
Development finance was named
Real estate development lending was identified as heavily concentrated exposure — the segment commercial brokers place most often.
The findings are checkable
A fund either publishes rates or it does not. It either has a written default policy or it does not. Every finding converts into one question.
What this is not
A sector surveillance identifying weak practice is not a finding that any individual fund has broken the law, and no fund is named here. ASIC has stated an expectation of future enforcement. Treat it as a prompt for diligence, not as an allegation against a lender on your panel.
The broker takeaway
Four surveillance findings, four questions, one email per placement. Does the fund publish borrower rates? Is there a written default management policy? How is default defined in this facility? What liquidity testing sits behind the drawdown schedule?
For clients already inside a facility, the June valuation requirement is the near-term issue — a refreshed valuation can move covenants and extension pricing before expiry.
Sources: Remarks by ASIC Commissioner Simone Constant at the CAFBA commercial property and development finance summit, Sydney, 22 September 2026, and reported findings of ASIC’s surveillance of 28 private credit funds, as reported by The Adviser, 23 September 2026.
Compliance · Broker Analysis
ASIC Told a Room of Commercial Brokers It Is ‘Beyond Warnings’ on Private Credit. Its 28-Fund Review Hands You Four Questions
The venue matters as much as the message. This was said at a commercial and development finance summit — to the people placing clients with these funds.
Speaking at the Commercial and Asset Finance Brokers Association summit on commercial property and development finance in Sydney on 22 September, ASIC Commissioner Simone Constant said the private credit sector should prepare for enforcement action. Behind the warning sits a surveillance of 28 private credit funds whose findings translate directly into questions a broker can ask before placing a client.
In this article
What was said, and where
ASIC Commissioner Simone Constant addressed the Commercial and Asset Finance Brokers Association’s commercial property and development finance summit in Sydney on 22 September 2026. Her statement on the sector’s direction of travel was unusually direct for a regulator speaking to an industry audience.
Note who was in the room. This was not delivered to fund managers at an investment conference. It was delivered to commercial and asset finance brokers — the intermediaries who introduce borrowers to these funds. A regulator choosing that audience for that sentence is making a point about where it expects diligence to happen.
The four findings that matter on a file
The warning rests on a surveillance of 28 private credit funds. Four of the reported findings are not abstract governance concerns — they describe things a broker can check before recommending a lender to a client.
| What ASIC’s surveillance found | What it means at the point of placement |
|---|---|
| Only 4 of the 28 funds published borrower interest-rate information | You may be unable to compare the actual cost to your client across funds using published material |
| Fewer than half had written credit or default management policies | What happens if your client falls behind may not be written down anywhere before it happens |
| Only 2 wholesale funds used stress testing for liquidity risk | A fund’s ability to keep funding drawdowns under stress may not have been modelled |
| Terminology such as “default” was used inconsistently across the sector | The same word can mean materially different things in two different facility documents |
The fourth is the one most likely to land on a broker. If “default” is defined differently from one facility to the next, then a client comparing two term sheets on rate alone is comparing two different risk profiles without knowing it — and so is the broker presenting them.
Each of these is a question with an answer. A fund either publishes borrower rate information or it does not. It either has a written default management policy or it does not. Asking is free, and the answer is useful whether or not enforcement ever arrives.
Why development finance was singled out
Constant identified real estate development lending as an area of heavily concentrated exposure. That concentration is the reason this sits on commercial brokers’ desks rather than only on fund managers’.
Development finance carries a particular shape of risk: the security is worth what the finished project is worth, the borrower’s capacity to repay depends on completion and sales, and the facility usually has to be extended or refinanced at least once. Every one of those pressure points runs through the lender’s own governance — how it values the asset, how it handles a stalled project, whether it can keep funding drawdowns.
Brokers placing development finance have seen what happens when that governance is tested. A lender that cannot fund the next drawdown is a problem no amount of borrower quality solves.
The June line in the sand on valuations
The September warning was not the first move. ASIC drew what was described as a line in the sand in June, requiring asset valuations to be refreshed and warning that managers avoiding write-downs would face direct regulatory attention.
That sequence is worth reading as a sequence. A specific requirement in June, then a general statement in September that the warning phase is over. Regulators do not usually describe their own position as “beyond warnings” unless the next step is already being prepared.
For a broker with a client currently inside a private credit facility, the valuation point is the one with near-term consequences. A refreshed valuation can change loan-to-value covenants, extension terms and the price of a refinance — none of which are things a client wants to discover at expiry.
What this does and does not mean for brokers
A few things need stating plainly, because this is an area where it is easy to overreach.
ASIC has announced an expectation of future enforcement in a sector. It has not made findings against any named fund in what was reported here, and nothing in this article suggests wrongdoing by any particular lender. A surveillance identifying weak disclosure or governance practice across a sample is not a finding that any individual fund has breached the law.
Equally, a broker is not the regulator. The job is not to audit a fund’s compliance. It is to ask the questions a reasonable adviser would ask on behalf of a client committing to a facility, and to record what answer came back.
General information, not compliance advice
Commercial and development finance sits under a different regulatory framework from regulated consumer credit, and the obligations that apply to any particular transaction depend on the facility, the borrower and your own licensing. This article does not state what any law or regulation requires of you.
Nothing here is a comment on the conduct of any named or unnamed fund. ASIC’s reported statements describe sector-wide surveillance findings and an expectation of future enforcement, not findings of contravention against any particular entity. Check your obligations with your licensee, aggregator or a compliance adviser, and seek independent legal advice where required.
Four questions to ask before you place
- Does the fund publish borrower interest-rate information, and where? Only four of the 28 funds in the surveillance did. If it does not publish, ask for the current rate card in writing so your client is comparing cost on a like-for-like basis.
- Is there a written credit and default management policy, and can you see it? Fewer than half of the funds reviewed had one. What a lender does when a project stalls is a question worth answering before the project stalls.
- How is “default” defined in this facility, specifically? ASIC found the term used inconsistently across the sector. Read the definition in the document rather than assuming it matches the last one you saw.
- What liquidity testing sits behind the drawdown schedule? Only two wholesale funds in the review used stress testing for liquidity risk. On a staged development facility, the lender’s ability to fund later drawdowns is a core risk to your client.
- When was the security last valued, and on what basis? ASIC required valuations to be refreshed in June. A stale valuation can move covenants and extension pricing at the worst moment.
- Record the answers in the file. Whatever the regulatory framework for a given transaction, a note showing which questions you asked and what you were told is the difference between a considered recommendation and an assumed one.
What to watch next
Watch for the first enforcement action, because it will define what “beyond warnings” meant in practice — disclosure, valuation, governance or something else. Watch whether funds start publishing borrower rate information voluntarily, which would be the cheapest possible response to the disclosure finding. And watch the valuation cycle, since refreshed valuations in a softening development market are where covenant pressure shows up first.
The broader point for commercial brokers is about position rather than prediction. A regulator that chooses a brokers’ summit to say the warning phase is over is describing where it thinks the questions should be asked. The four findings above are a free checklist, and asking them costs one email per placement.
Key takeaways
- ASIC Commissioner Simone Constant told the CAFBA commercial property and development finance summit in Sydney on 22 September 2026 that the private credit sector is “beyond warnings” and should prepare for enforcement action.
- The warning follows a surveillance of 28 private credit funds: only 4 published borrower interest-rate information, fewer than half had written credit or default management policies, and only 2 wholesale funds used stress testing for liquidity risk.
- ASIC also found the term “default” used inconsistently across the sector, which means two facilities can price similarly while carrying materially different trigger points.
- Real estate development lending was identified as an area of heavily concentrated exposure — the segment commercial brokers place most often.
- ASIC had already required asset valuations to be refreshed in June, warning that managers avoiding write-downs would face direct regulatory attention.
- None of this constitutes a finding against any particular fund. It is a sector-wide surveillance result and a statement of future enforcement intent, and the practical response is to ask the four questions and record the answers.
Common questions
Does this mean private credit funds have broken the law?
No. What was reported is a sector-wide surveillance identifying weak practice across a sample of 28 funds, together with a statement that ASIC expects to move to enforcement. That is not a finding of contravention against any particular fund, and nothing in this article suggests wrongdoing by any named or unnamed lender.
Why should a broker care if this is a regulatory matter for the funds?
Because the findings describe things that affect a client at the point of placement — whether the cost is comparable, what happens on default, and whether the lender can fund later drawdowns. Constant made the remarks to an audience of commercial and asset finance brokers, which is itself an indication of where the regulator expects diligence.
Is commercial and development finance covered by the same rules as home lending?
Generally no — regulated consumer credit and commercial lending sit under different frameworks, and what applies to a given transaction depends on the facility, the borrower and your licensing. This article does not state what any law requires of you; confirm that with your licensee or a compliance adviser.
What is the single most useful question from the surveillance?
Probably the definition of default in the specific facility. ASIC found the term used inconsistently across the sector, so two term sheets at similar rates can carry very different trigger points. That is a difference your client will only discover at the worst possible time.
What about clients already inside a private credit facility?
The valuation point is the near-term one. ASIC required valuations to be refreshed in June, and a refreshed valuation can move loan-to-value covenants, extension terms and refinance pricing. Worth raising with those clients ahead of expiry rather than at it.
Sources and method: Commissioner Simone Constant’s remarks at the Commercial and Asset Finance Brokers Association commercial property and development finance summit in Sydney on 22 September 2026, and the reported findings of ASIC’s surveillance of 28 private credit funds, as reported by The Adviser, 23 September 2026. The June requirement to refresh asset valuations and the warning of “direct regulatory attention” for managers avoiding write-downs are as described in that reporting. Surveillance findings are sector-level results and are not findings of contravention against any individual fund. This article does not state the regulatory obligations applying to any particular transaction.
Breaking news for modern brokers
Lender policy, regulation and market moves, read for what they change on your desk.
More at The Broker Times →Broker Tool
Private Credit Placement: The Diligence Pass
Each item comes from ASIC’s reported surveillance of 28 private credit funds. These are questions with answers — a fund either does these things or it does not. Work through them for the lender on your current file.
Tick what you can already answer for the fund you are about to use
Record the answers, not just the questions
A note showing what you asked and what you were told is the point of the exercise. This is a general prompt built from reported surveillance findings, not advice about your obligations, and not a comment on any particular fund. Confirm what applies to your transactions with your licensee or a compliance adviser.
Disclaimer: This article is for general information and professional development purposes only. It does not constitute legal, compliance, or financial advice. Brokers should consult their aggregator’s compliance team and, where required, seek independent legal advice regarding their obligations under the National Consumer Credit Protection Act 2009 and ASIC’s responsible lending guidelines.
