Funds Update - 16 October 2026

In this Funds Update for 16 October 2026:

1. ASIC makes interim stop orders in relation to private credit funds.
2. ASIC’s superannuation review foreshadows greater scrutiny of managed fund valuations.

1. ASIC makes interim stop orders in relation to private credit funds

On 8 October 2026, ASIC issued an interim stop order on the product disclosure statement (PDS) of units in several registered managed investment schemes (the Funds). The Funds invested in short-term mortgages secured over Australian real property (vacant land, residential, commercial, retail or industrial properties), with over $251.8 million in assets under management. 

ASIC expressed concern that the PDS: 

• fails to disclose information about the Funds’ loan portfolio and diversification metrics and the information that is disclosed about these is not disclosed in a clear concise and effective manner;
• may contain a misleading and deceptive statement and omit information about the cost of disposing of an interest in the Funds; and
• fails to adequately disclose details of an investor reserve account established to cover impairments and capital losses.

These orders arise from ASIC’s continued surveillance of the private credit market. 

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2. ASIC’s superannuation review foreshadows greater scrutiny of managed fund valuations

On 14 October 2026, ASIC released its findings from its second year of surveillance into the financial reporting and audit practices of registrable superannuation entities (RSEs). In this latest report (REP 841), ASIC identified ongoing concerns with the valuations of unlisted investments and the quality of the audit information supporting those valuations. 

Of note, ASIC found that RSEs often relied on valuations provided by external fund managers and, in many cases, did not have access to the detailed valuation models, assumptions and supporting information underpinning those valuations. 

ASIC emphasised that RSEs remain responsible for ensuring that fair values reported in their financial reports are determined in accordance with accounting standards, rather than relying solely on valuation outcomes provided by external managers. It also criticised some audit practices that did not adequately test the methodologies, assumptions and data underpinning those valuations.

ASIC also announced that it will extend its financial reporting and audit surveillance program to managed investment schemes in 2026-27.

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