Borrow
ASIC's crackdown on private credit sector gains support from industry veteran
Borrow
ASIC's crackdown on private credit sector gains support from industry veteran
In the wake of the Australian Securities and Investments Commission's (ASIC) recent regulatory actions, Richard Woodhead, Founder and Managing Director of GPS Investment Fund, has voiced strong support for tougher regulations in the private credit sector. As one of Australia's established private credit managers, Woodhead is advocating for increased scrutiny, transparency, and accountability within the industry.
ASIC's crackdown on private credit sector gains support from industry veteran
In the wake of the Australian Securities and Investments Commission's (ASIC) recent regulatory actions, Richard Woodhead, Founder and Managing Director of GPS Investment Fund, has voiced strong support for tougher regulations in the private credit sector. As one of Australia's established private credit managers, Woodhead is advocating for increased scrutiny, transparency, and accountability within the industry.
ASIC recently issued a stop order against RELI Capital and La Trobe Financial, alongside releasing findings from its private credit surveillance. These actions were prompted by concerns over transparency failures, governance issues, and conflicts of interest within the sector. Woodhead sees these developments as a necessary step towards safeguarding investors and restoring trust in the industry.
"ASIC's stop order against RELI Capital, La Trobe, and findings from its private credit surveillance highlight why more regulation is good for the sector," Woodhead stated. "Private credit has a legitimate and vital role to play in Australia's financial system, but with growth has come necessary scrutiny."
Woodhead, who has been a participant in the private credit sector for the last 30 years, expressed concerns over the impact of unscrupulous practices on investors. "As a participant in the Private Credit sector for the last 30 years, we have seen the sector, and its investors, damaged by wayward private credit providers prioritising profit, over investors' best interests," he noted. "We respect the licence that we were granted many years ago, and wholeheartedly support any, and all efforts, to enforce compliance and protect mum and dad investors."
The recent ASIC report catalogued a variety of questionable practices, including transparency failures and governance issues, which have contributed to a growing lack of trust among investors. Woodhead emphasised the importance of restoring trust through increased transparency and discipline within the industry. "Trust needs to be earned back through transparency, discipline and performance," he said. "The industry has a responsibility to investors, yet compliance loopholes are being exploited to circumvent rules."
Woodhead believes that not all private credit companies are engaged in these questionable practices and that distinguishing between ethical and unethical operators is crucial for rebuilding investor confidence. "Not all Private Credit companies are involved in these practices and being able to distinguish between the good and bad will go a long way to restoring that trust," he stated.
The veteran industry leader is calling for private credit to be held to the same standards as other financial services sectors. He argues that enhanced regulation will lead to improved outcomes for investors by allowing them to make more informed decisions. "Private credit should be held to the same standard of discipline, disclosure and accountability as any other part of the financial services industry," Woodhead asserted. "Enhanced regulation will raise standards across the sector which will ultimately result in better outcomes for investors, or at least the ability for them to make more accurate and informed decisions."
ASIC's recent actions have highlighted the need for more stringent oversight in the private credit sector, which has grown rapidly in recent years. The regulator's findings have underscored the importance of addressing poor conduct that undermines investor confidence. Woodhead sees this as a pivotal moment for the industry to embrace change and improve its practices.
"This is necessary given ASIC's evidence of poor conduct that undermines investor confidence in private credit markets," Woodhead concluded.
As the private credit sector continues to expand, the call for increased regulation and accountability is gaining traction. Industry leaders like Woodhead are advocating for a more transparent and disciplined approach, which they believe will ultimately benefit both investors and the sector as a whole. With ASIC's ongoing efforts to enforce compliance, the private credit industry is poised for significant changes that could reshape its future.
RELATED ARTICLES
Banking
Why central banks are ditching Treasuries for gold and what it means for business leaders
Gold’s renaissance is no longer just an investor narrative; it’s a reserve‑management strategy. Multiple reports indicate central bank gold holdings now exceed US Treasuries by value for the first ...Read more
Banking
AMP Bank GO strengthens fraud protection with innovative security measures
AMP Bank GO has emerged as a formidable player in the fight against financial fraud, with its innovative security measures setting new standards in the digital banking sector. Since its launch in ...Read more
Banking
APRA’s hybrid exit is a A$43bn catalyst: who captures the flow—bank credit or private credit?
Australia’s phase-out of bank hybrids isn’t just a regulatory clean-up—it’s a forced portfolio reallocation the size of a mid-tier super fund. Read more
Banking
AMP Bank GO adds business overdraft to mobile platform for small businesses
AMP Bank has launched a business overdraft feature within its mobile-first banking platform AMP Bank GO as cash flow concerns continue to affect small business owners across Australia. Read more
Banking
Bendigo Bank named most trusted bank in Australia for 10th consecutive quarter
Bendigo Bank has retained its position as Australia's most trusted bank, according to the latest trust rankings released by research firm Roy Morgan. Read more
Banking
Account-to-account and instant payments set to reshape global payments landscape
A new report from Capgemini predicts that instant payments will account for 22% of all non-cash transactions globally by 2028, signaling a major shift in the payments industry. Read more
Banking
Powell's Jackson Hole speech to shape market expectations on rate cuts
All eyes are on Federal Reserve Chair Jerome Powell's upcoming speech at the Jackson Hole symposium, as investors anxiously await clues about the central bank's future rate decisions. Read more
Banking
Bendigo Bank economist forecasts stable rates for 2024, cuts in 2025
Bendigo Bank's Chief Economist David Robertson is maintaining his prediction that the Reserve Bank of Australia (RBA) will keep interest rates unchanged throughout 2024, with cuts likely to begin in ...Read more
Banking
Why central banks are ditching Treasuries for gold and what it means for business leaders
Gold’s renaissance is no longer just an investor narrative; it’s a reserve‑management strategy. Multiple reports indicate central bank gold holdings now exceed US Treasuries by value for the first ...Read more
Banking
AMP Bank GO strengthens fraud protection with innovative security measures
AMP Bank GO has emerged as a formidable player in the fight against financial fraud, with its innovative security measures setting new standards in the digital banking sector. Since its launch in ...Read more
Banking
APRA’s hybrid exit is a A$43bn catalyst: who captures the flow—bank credit or private credit?
Australia’s phase-out of bank hybrids isn’t just a regulatory clean-up—it’s a forced portfolio reallocation the size of a mid-tier super fund. Read more
Banking
AMP Bank GO adds business overdraft to mobile platform for small businesses
AMP Bank has launched a business overdraft feature within its mobile-first banking platform AMP Bank GO as cash flow concerns continue to affect small business owners across Australia. Read more
Banking
Bendigo Bank named most trusted bank in Australia for 10th consecutive quarter
Bendigo Bank has retained its position as Australia's most trusted bank, according to the latest trust rankings released by research firm Roy Morgan. Read more
Banking
Account-to-account and instant payments set to reshape global payments landscape
A new report from Capgemini predicts that instant payments will account for 22% of all non-cash transactions globally by 2028, signaling a major shift in the payments industry. Read more
Banking
Powell's Jackson Hole speech to shape market expectations on rate cuts
All eyes are on Federal Reserve Chair Jerome Powell's upcoming speech at the Jackson Hole symposium, as investors anxiously await clues about the central bank's future rate decisions. Read more
Banking
Bendigo Bank economist forecasts stable rates for 2024, cuts in 2025
Bendigo Bank's Chief Economist David Robertson is maintaining his prediction that the Reserve Bank of Australia (RBA) will keep interest rates unchanged throughout 2024, with cuts likely to begin in ...Read more
