How ASIC REP 823 Reporting Obligations Will Impact Australian Wholesale Private Credit Funds6 min read

Introduction

In November 2025, the Australian Securities and Investments Commission (ASIC) released Report 823 (REP 823) and Report 820 (REP 820), signalling a major regulatory shift for the Australian private credit market. Historically, wholesale funds in the non-bank finance segment operated under lighter-touch reporting frameworks, but regulators now focus on private credit funds to close visibility gaps across the private market. The proposed reforms aim to introduce retail-like oversight, including a mandatory wholesale scheme notification obligation and recurrent fund-level data collection.

This article explains these proposed changes for fund managers so you can prepare your operations for Australia’s evolving capital markets. It provides compliance decision trees detailing “If you operate X structure, here’s what you may have to do,” plus an implementation plan for governance, reporting, and investor comms that aligns with the regulator’s principles for private credit done well.

Interactive Tool: Check Your ASIC Notification & Reporting Obligations

The Focus to Regulate Wholesale Private Credit Funds Like Retail Schemes

Understanding the Findings from ASIC REP 820 & REP 823

ASIC's intensified focus on the Australian private credit market follows detailed surveillance that identified significant compliance issues within the sector. The findings, outlined in reports such as REP 820 and REP 823, revealed inconsistent practices among wholesale funds that prompted calls for greater oversight.

Consequently, the regulator highlighted several areas of concern where practices fell short of legal obligations, pointing to potential risks for investors and the broader capital market. ASIC's surveillance identified a number of specific failings, including:

• Poorly managed conflicts of interest: Some fund operators did not adequately manage conflicts of interest for private credit, particularly in relation to related-party transactions and the allocation of assets across different funds.
• Opaque fee structures: Fee and margin disclosures were often unclear, making it difficult for investors to understand the total costs. This included a failure to properly disclose how borrower-paid fees were retained by fund managers.
• Inconsistent valuation practices: There was a lack of uniformity in valuation methodologies, frequency, and independence. These inconsistencies could affect entry and exit pricing for investors as well as the calculation of management and performance fees.
• Weak governance frameworks: Many wholesale funds operated with mixed governance practices—an area where robust regulatory compliance for private lenders is critical—sometimes lacking independent oversight on trustee boards, which could risk unfair outcomes for investors.
• Inadequate risk management: Key risk areas, such as liquidity and credit risk, were not always managed effectively. For example, ASIC's review found that very few wholesale funds performed stress testing as part of their liquidity risk management.
• Lack of transparency: Reporting to investors often lacked detail on portfolio composition, impaired assets, and risk exposures, hindering informed decision-making.

The Gap in Australian Private Capital Market Oversight

The push for stronger regulation is also a response to Australia's historically permissive framework for wholesale managed investment schemes. This approach has not kept pace with the rapid growth of the private capital market and has positioned Australia as an outlier when compared to international standards.

Furthermore, ASIC noted in REP 823 that Australia's regulatory settings for wholesale funds lag behind those in peer jurisdictions like the United States, the United Kingdom, Europe, and Singapore. Ultimately, this has created a significant blind spot for regulators, limiting their ability to supervise the sector effectively. Key gaps in the previous oversight framework included:

• Limited visibility of wholesale funds: Unlike in many other countries, operators of wholesale funds in Australia were not required to notify ASIC of a fund's existence. This made it difficult for the regulator to even dimension the size and scope of the market.
• Insufficient data collection: Reporting requirements were often retrospective and at the entity level rather than the fund level. This left ASIC without crucial, timely data on fund activities, leverage, liquidity, and asset concentrations.
• Fewer statutory obligations: Wholesale fund operators were not subject to the same statutory duties as responsible entities of retail schemes, such as the duties to act in members' best interests and treat members of the same class equally.

The Proposed Wholesale Scheme Notification Obligation for Non-Bank Finance Companies

Identifying Which Wholesale Funds Require ASIC Notification

In late 2025, the Australian Securities and Investments Commission (ASIC) proposed a significant change to the regulation of wholesale funds. Outlined in Report 823, the proposal would require operators to notify ASIC upon the establishment of a new wholesale scheme. Consequently, this notification would automatically trigger recurrent data reporting obligations for the fund manager.

The primary goal of this proposed obligation is to increase regulatory visibility. ASIC has noted that there are material gaps in its knowledge of the wholesale funds sector, often requiring the regulator to contact operators directly just to identify which funds are in operation. Therefore, this reform aims to provide ASIC with fundamental information about wholesale funds to support more effective supervision and risk assessment across the Australian capital market.

The scope of the notification requirement is expected to be broad. Due to the wide legal definition of a 'managed investment scheme', the rule could potentially capture a variety of structures beyond traditional funds, including:

• joint ventures;
• institutional-style clubs; and
• syndicated capital structures.

The Impact on Fund Manager Confidentiality & Structuring Timelines

The proposed notification obligation has raised concerns within the private credit and broader private capital industry regarding confidentiality and operational efficiency. A key issue is the potential impact on investment structures that depend on rapid formation and a high degree of privacy.

Industry participants have noted that many investment holding structures must be established within short timeframes to execute transactions effectively. As a result, a mandatory notification process could introduce administrative delays that inhibit the speed required for these deals.

Confidentiality is another major concern for any fund manager. The requirement to provide information to ASIC about a new fund's establishment raises questions about how that data will be stored and used, and whether it could become publicly accessible. Ultimately, this potential loss of privacy could affect the flexibility that sponsors and managers currently have to develop innovative and commercially sensitive investment structures.

Preparing for Recurrent Fund-Level Reporting in the Australian Private Credit Market

The Push for Standardised Data Collection & Transparency

ASIC has identified significant blind spots in its oversight of the Australian private credit market, noting that the current regulatory framework lags behind peer jurisdictions. Currently, much of the existing reporting is conducted at an entity level, is retrospective, and is not machine-readable. As a result, this approach leaves gaps in visibility over crucial risk indicators, including:

• leverage;
• liquidity;
• valuation methods; and
• asset concentration.

These data gaps limit the regulator's ability to supervise private capital funds, monitor market shifts, and assess how the sector might respond in a system stress scenario. To address this, ASIC is advocating for a shift towards recurrent, fund-level data collection. Ultimately, the objective is to establish a "collect-once" digital reporting standard that provides more timely and reliable information.

In line with this goal, ASIC plans to work with industry and government agencies to conduct a data pilot during the 2026-27 financial year. This pilot will involve a small sample of retail and wholesale funds to help determine baseline data needs. Furthermore, it will test the feasibility of the new approach and inform potential law reform for ongoing data collection.

Key Metrics Likely Required in Future Fund-Level Reports

To achieve greater transparency and effective supervision, fund operators in the Australian private credit market should prepare to provide more granular, fund-specific information. ASIC has indicated that future reporting obligations will likely cover a range of key metrics to give a comprehensive view of a fund's activities and risk profile. Based on the regulator's findings, the required data points may include:

• Basic fund details: Information on the investment strategy, types of investors, assets under management (AUM), and key third-party service providers.
• Fund flows: Data on capital movements, including subscriptions, redemptions, and distributions to investors.
• Portfolio composition: Details on the types of underlying assets, key counterparties, and any significant concentrations.
• Performance and fees: Information regarding fund performance, fee structures, and overall costs passed on to investors.
• Leverage: Reporting on the level of borrowing or leverage employed within the fund's structure.

Compliance Decision Trees for Private Lenders & Fund Operators

Determining Your Obligations if You Operate a Syndicated Capital Structure

Operators of syndicated capital structures should assess whether their arrangements fall under the definition of a managed investment scheme, a process that often requires a review of the loan structuring and documentation. The proposed reforms from late 2025 by the Australian Securities and Investments Commission (ASIC) could introduce new obligations for these structures if they are captured. Consider the following points to determine your potential future requirements:

• Managed investment scheme definition: If your structure involves pooling contributions from multiple investors to produce financial benefits, and those investors do not have day-to-day control over the operation, it is likely a managed investment scheme.
• ASIC notification obligation: Under the proposals outlined in reports like REP 823, you may be required to notify ASIC upon the establishment of any new syndicated fund, which would be a significant shift from the previous regulatory framework for wholesale funds.
• Recurrent data reporting: A notification to ASIC could automatically trigger an obligation for recurrent, fund-level data reporting, potentially including detailed information on fund flows, underlying assets, leverage, and fees.
• Extension of statutory duties: There is a proposal to extend statutory duties, similar to those for retail funds, to wholesale fund operators. This could include the duty to treat investors of the same class equally, which may impact the flexibility currently available in syndicated arrangements regarding fees and liquidity.

Assessing Requirements for Mandate Investments & Co-Investment Opportunities

The broad legal definition of a 'managed investment scheme' means that structures like 'fund of one' mandates, co-investments, and institutional-style clubs could be affected by the proposed regulatory changes. Even if not traditionally viewed as a pooled fund, these arrangements may still fall within the scope of the reforms. To assess the potential impact on your operations, consider these factors:

• Broad scheme definition: The proposed changes from ASIC have the potential to capture structures that function as joint ventures or club deals. If multiple parties contribute capital to a common enterprise with the expectation of profit, the arrangement could be deemed a managed investment scheme, a common outcome that requires careful joint venture structuring.
• Potential for notification: If your mandate or co-investment structure is classified as a wholesale scheme, you may need to notify ASIC at its inception. This could introduce new administrative steps into what are often time-sensitive transactions.
• Trigger for reporting: Similar to syndicated structures, this notification could lead to ongoing data reporting obligations, increasing the compliance burden for what was previously a private arrangement.
• Impact of statutory duties: The proposed extension of statutory duties could affect the bespoke nature of mandate and co-investment deals. An obligation to treat members of the same class equally could limit the ability to offer preferential terms, which is a common feature of these investment models.

Implementation Plan for Governance Reporting & Investor Communications

Upgrading Internal Data Architecture & Digital Reporting Capabilities

Fund operators should prepare for a shift towards recurrent, machine-readable data reporting to meet anticipated regulatory standards from the Australian Securities and Investments Commission (ASIC). The regulator has signalled its intention to move towards a "collect-once" digital reporting framework to close visibility gaps in the private credit market. As a result, proactively upgrading internal systems now can position your operations for future compliance.

Your data architecture and controls should be capable of producing reliable and auditable data. Key areas to focus on include:

• Portfolio composition: Systems should track and report on underlying assets, key counterparties, and risk concentrations.
• Fees and margins: Ensure you can accurately disclose all fee and margin practices, including any borrower-paid fees retained by the manager.
• Valuation governance: Your data framework must support disclosures on valuation methodologies, frequency, and the level of independence in the process.
• Conflicts of interest: Be prepared to report on how conflicts are identified and managed, particularly concerning related-party transactions.
• Liquidity and redemptions: Data systems should align with the liquidity design of open-ended funds, including clear redemption terms and the results of stress testing.
• Credit risk framework: Maintain documented processes for loan origination, monitoring, impairment, and defaults that can be easily reported.

Aligning Investor Communications with Principles for Private Credit Done Well

ASIC has outlined its "principles for private credit done well," which serve as a benchmark for industry practices. Aligning your investor communications with these principles can build trust and demonstrate a commitment to high standards of governance and transparency. Ultimately, this involves moving beyond minimum disclosure requirements to provide clear, comprehensive, and timely information.

To implement these principles effectively, fund managers should enhance their communications in several key areas:

• Act as stewards of capital: Clearly communicate how the board and trustee are actively overseeing fund operations, including decisions on valuations, conflicts, and impaired assets, to ensure investor interests are prioritised.
• Provide full transparency: Offer investors timely information on investment strategies, portfolio exposures, risks, and fees. In addition, this includes adopting consistent terminology for reporting to allow for easier comparison and understanding.
• Disclose all fees and costs: Your communications should provide a clear view of all costs. This means disclosing every income stream, such as management and performance fees, borrower-paid fees, origination margins, and any default interest retained by the manager.
• Clarify valuation practices: Implement and communicate clear and consistent valuation policies. Investors should understand the methodologies used, the frequency of valuations (e.g., monthly or quarterly), and the degree of independence involved, including any periodic external audits.
• Explain liquidity and credit risks: Effectively disclose liquidity risk management practices, including redemption terms and the use of liquidity gates. Furthermore, your credit risk management framework, from assessment and monitoring to impairment and default processes, should also be clearly explained.

Other Proposed Reforms Impacting Australian Private Capital Operators

Extending Annual Audited Financial Report Requirements to Wholesale Funds

In late 2025, the Australian Securities and Investments Commission (ASIC) proposed extending the requirement for annual audited financial reports to wholesale funds. This change would align their obligations with those of retail registered schemes, which must prepare, audit, and lodge these reports. Currently, wholesale fund operators are only required to do this at a firm level, not for each individual fund.

The primary reason for this proposal, as outlined in reports like REP 823, is to address the opaque nature of the private market. ASIC identified that without mandatory fund-level audits, there is less confidence in the valuation of assets. Therefore, this reform aims to achieve greater transparency and assurance regarding the financial position and risks of wholesale funds.

While this change would likely increase compliance costs for a fund manager, ASIC believes it is a critical step to support valuation confidence for investors and the broader market.

The Potential Application of Statutory Duties & Significant Event Notices

ASIC also put forward for consideration several other reforms that could significantly affect wholesale fund operators. Ultimately, these proposals aim to introduce investor protections similar to those in the retail sector.

One of the most significant proposals involves extending the statutory duties from Chapter 5C of the Corporations Act 2001 (Cth) to wholesale fund operators. These duties include the obligation to:

• Act honestly and with care and diligence;
• Act in the best interests of fund members; and
• Treat members of the same class equally and members of different classes fairly.

Applying these duties, particularly the requirement for equal treatment, could remove much of the flexibility that wholesale funds currently have. As a result, this may impact their ability to create durable private lending structures, offer preferential terms, or use side letters with certain investors.

Another proposal is to introduce a 'significant event notice' regime for wholesale funds. This would require a fund manager to promptly notify both ASIC and investors of major events, such as the suspension of redemptions.

Currently, there is no requirement for wholesale fund operators to notify ASIC of such events, which can prevent timely intervention. This reform would allow investors to make more informed decisions and enable ASIC to take action earlier to protect investor interests.

Conclusion

The Australian Securities and Investments Commission (ASIC) has signalled a significant regulatory shift for wholesale funds, with reports like REP 823 and REP 820 proposing greater oversight for the private credit market. These proposed changes, including a new notification obligation and recurrent reporting, aim to increase transparency and align the Australian private capital market more closely with retail scheme regulations.

As the regulatory landscape for the Australian private credit market evolves, fund managers should prepare for these potential new obligations. For guidance on how these proposed changes may affect your operations, contact the private lender and non-bank finance lawyers at GRM LAW to help you adapt your compliance frameworks and ensure your fund remains compliant with evolving ASIC standards.

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