ASIC lifts stop orders against Remara

ASIC has lifted three interim stop orders against Remara Investment Management's private credit products, after it amended its target market determination (TMD).

Last week, the corporate watchdog claimed the products 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 had hit Remara and its trustee Melbourne Securities Corporation (MSC) with the interim design distribution orders (DDO) stop orders for 21 days unless revoked earlier.

Amendments made by Remara addressed ASIC's concerns by removing 'capital preservation' as a suitable investment objective and introducing a new category of 'low capital volatility'.

It also amended the rating of the consumer's risk and return profile from low to a rating of medium and potentially low to medium.

The fund removed generalised access-to-capital categories and replaced them with categories specific to the products, which consider the redemption timeframes under its constitution.

It also reduced the percentage of investor's investable assets considered to be appropriate for investment in the products from 'major component' (up to 75%) and 'core component' (up to 50%) to 'minor' (up to 25%) and 'satellite' (up to 10%).

ASIC recommended investors in the products to review whether they remain suitable for their financial objectives, situation or needs.

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.

Last week, the corporate regulator urged the private credit sector to uplift standards, noting participants should prepare for enforcement action if they fail to do so.