ASIC halts Remara's private credit products for TMD deficiencies

ASIC has slapped interim stop orders on Remara Investment Management's private credit products over deficiencies in its target market determination (TMD), claiming they were too risky for retail investors.

The three products - the 6 Month (Fixed and Variable) Account, 12 Month (Fixed and Variable) Account and At Call Account - sit under the Remara Cash Management Fund, a registered managed investment scheme.

ASIC hit Remara and its trustee Melbourne Securities Corporation (MSC) with the interim design distribution orders (DDO) stop orders for 21 days unless revoked earlier.

During this time, MSC will cease dealing in interests, issuing a product disclosure statement for, or providing general financial product advice to retail clients recommending an investment in, the fund's products.

The fund has $39.9 million in assets under management at the end of December 2025. It invests in short-term notes linked to a pool of Australian credit investments that are AAA-rated, and investment-grade securitised and equivalent shadow-rated instruments, which are internal credit evaluations that assess the credit risk of issuers that do not have public ratings.

They include public and private residential mortgage-backed securities, asset-backed securities and mortgage-backed securities. The fund may invest up to 100% of its assets in shadow-rated instruments.

The fund is not a capital protected or capital guaranteed product, ASIC said, and there is no guarantee of the investment result, return or the amount payable to the consumer.

ASIC said the fund's TMD suggested inappropriate levels of portfolio allocation as a "major component" of up to 75% and a "core component" or up to 50%.

The fund also claimed to be suitable for retail investors seeking capital preservation and contained inappropriate timeframes for retail investors to access capital.

It also has an inappropriate rating of "low risk" for the consumer's risk and return profile.

Remara describes the At Call Account, for example, as a "low-risk investment account backed by AA investment grade assets that makes investing your savings a breeze" and offers "a high-interest rate regardless of your account balance or whether you make regular investments."

Foresight Analytics has assigned this product a "very strong" investment rating and a product complexity indicator of "complex."

ASIC commissioner Simone Constant said the regulator is taking this action to protect retail investors from acquiring products that may not be suitable for their financial objectives, situation or needs.

"Where ASIC identifies concerns that products may be reaching retail investors they were not designed for, we will use our regulatory tools to act swiftly to intervene early, disrupt poor practices and protect investors from potential harm," she said.

ASIC's surveillance of private credit funds includes targeting the distribution of private credit funds to retail clients through direct and advised channels, as well as examining fees, margin structures and conflict-of-interest management in wholesale private credit funds.