Less than one week after imposing an interim stop order on the La Trobe Australian Credit Fund, the order has been lifted.
The order was imposed on 18 September by ASIC after concerns that the target market determination (TMD) for the 12-Month Term Account and 2-Year Account products suggested an inappropriate level of portfolio allocation given the risks of the fund and did not include appropriate distribution conditions.
This prevented La Trobe from dealing in interests giving a product disclosure statement for, or providing general financial product advice to, retail clients recommending an investment in the fund.
But speaking to investors on 24 September, La Trobe chief investment officer Chris Paton said the order for the fund had now been lifted after the asset manager took steps to change the TMD.
“We worked closely with ASIC to address their requirements and are pleased to have satisfied all of our regulatory obligations. We have updated our TMDs, and in the coming days, we will outline the minor changes and what it means for prospective investors and our adviser partners.”
The interim orders, which are put in place for 21 days unless lifted earlier, had been implemented following a surveillance of retail private market funds by the corporate regulator as part of its private market review.
This review is seeking to understand how retail investors are accessing the funds, how transparency of the vehicles can be improved, their fund governance, valuation practices and management of conflicts of interest. An initial report was released last week and a further report in the funds is expected in November.
While the sector is in the spotlight, Paton doubled down on the benefits of private credit for Australian investors.
“La Trobe Financial is fully aligned with ASIC’s actions to lift standards in the private credit industry as well as its view on the importance of the private credit sector to the Australian economy,” he said.
“Private credit plays a vital role in supporting high-quality borrowers who may not be served by traditional banking channels, while offering investors access to diversified, resilient income streams.”
The interim stop order was also imposed on the $215 million La Trobe US Private Credit Fund and remains in place as of 25 September.
