Australian regulator halts sales of Fidante credit fund over investor suitability concerns

By Reuters News

Oct 13 (Reuters) - Australia's corporate regulator on Tuesday temporarily barred Fidante Partners from selling units in a credit fund, citing concerns that the product's target market determination was not appropriate for the retail investors it was intended to serve.


Here are more details:

  • Australian Securities and Investments Commission (ASIC) said it is concerned Fidante may not have met product design and distribution obligations that apply to issuers and distributors

  • The regulator said the Ares Global Credit Income Fund was unlikely to meet the objectives, financial circumstances and needs of the retail investors it targeted

  • ASIC said the fund's target market included investors seeking medium-to-high risk and return exposure while also looking to preserve capital

  • The interim stop order prevents Fidante from dealing in the fund, issuing a product disclosure statement for it, or providing general advice recommending the product to retail clients, ASIC said

  • This action forms part of ASIC's efforts to address risks in the private credit sector, Commissioner Simone Constant said

  • The order remains in effect for 21 days unless revoked earlier

  • Shares of Challenger Ltd CGF.AX, which includes Fidante among its investment businesses, fell as much as 2.3%, their steepest intraday decline since October 1

  • Fidante Partners did not immediately respond to a Reuters request for comment.

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