The Australian Securities and Investments Commission (ASIC) has temporarily blocked Australian Secure Capital Fund ASCF) from offering units in three mortgage funds, citing concerns that the funds’ disclosure to investors may be defective.
The order is not yet final. ASCF can make submissions before ASIC decides whether to impose a final stop order, which the regulator said it would consider if its concerns are not resolved promptly.
The interim stop order applies to the product disclosure statement (PDS) – the document that sets out a financial product’s features, fees, and risks for investors – covering the ASCF Premium Capital Fund, ASCF Select Income Fund, and ASCF High Yield Fund. While the order is in place, ASCF cannot offer, issue, sell, or transfer interests in the funds.
The three registered managed investment schemes held $251.8 million in assets under management of 30 June. Each invests in short-term mortgages secured over Australian property, including vacant land and residential, commercial, retail, and industrial sites.
ASIC’s most serious concern is that the PDS may contain a misleading and deceptive statement. The regulator also said the document leaves out the cost of exiting an investment, does not adequately explain an investor reserve account set up to cover impairments and capital losses, and fails to clearly disclose the funds’ loan portfolio and diversification.
ASIC commissioner Simone Constant said high standards were essential in private credit, which refers to lending by non-bank funds directly to borrowers.
“Firms must ensure their disclosures to investors are transparent and support informed decision making, including to help investors understand the strategies and risks of their products,” Constant said in a media release.
The order stems from ASIC’s broader surveillance of non-bank lending funds, including how they are sold to retail investors.
Poor private credit practices are one of ASIC’s 2026 enforcement priorities. The regulator has used stop orders in the sector before: in September 2025, it issued interim orders against three La Trobe Financial products, all of which were later revoked after La Trobe amended its target market determinations.
Constant signalled more of the same, saying the regulator would “act swiftly to protect investors from potential harm” where it identifies disclosure problems.
Funds like ASCF’s are part of a non-bank lending market that has become a major source of property finance outside the banks. The sector accounts for an estimated 26% of residential development lending in Australia, and CBRE expects it to grow from about $50 billion to $90 billion by 2029.
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