ASIC issues interim stop order against Fidante over DDO obligations concerns

On 13 October 2026, the Australian Securities and Investments Commission (ASIC) made an interim stop order against Fidante Partners Limited (Fidante) under the design and distribution obligations (DDO obligations). The order stops Fidante from issuing Class A units in the Ares Global Credit Income Fund (Fund) to retail clients.

ASIC is concerned that the Fund’s target market determination (TMD) is not appropriate. A TMD is the document that sets out who a financial product is designed for, and how it should be distributed. This is ASIC’s latest step in its focus on private credit funds sold to retail investors.

The order is interim. ASIC has raised concerns, but it has not made a final finding that Fidante breached the law.

Key points at a glance

• ASIC made an interim stop order under the DDO obligations on 13 October 2026.
• The order stops Fidante from issuing Class A units in the Fund, giving a product disclosure statement (PDS) for it, or giving general advice recommending it to retail clients.
• It lasts for 21 days unless ASIC revokes it earlier.
• ASIC’s concerns relate to the Fund’s stated risk profile, its suitability for capital preservation, the suggested portfolio allocation (up to 50%) and the timeframe for investors to access their money.
• The Fund had about $799.9 million under management at 30 June 2026.
• The order came out of ASIC’s ongoing surveillance of private credit funds.

What is a stop order under the DDO obligations?

The DDO obligations are in Part 7.8A of the Corporations Act 2001 (Cth). They have applied since 5 October 2021. They require issuers of financial products for retail clients to make a TMD (section 994B) and to take reasonable steps so that products reach the consumers they were designed for.

Under section 994J, ASIC can make a stop order if a product has no TMD, or if its TMD is not appropriate. A TMD is not appropriate if the product would be unlikely to be consistent with the objectives, financial situation and needs of a retail client in the target market.

ASIC can first make an interim stop order, which lasts 21 days unless it is revoked sooner. The issuer then has a chance to respond at a hearing before ASIC decides whether to make a final stop order. For more background, see our article on ASIC’s final stop order against Indy-C.

Why did ASIC act against Fidante?

According to ASIC’s media release, ASIC is concerned that Fidante has not met its DDO obligations. ASIC considers that the Fund would be unlikely to suit a retail client in the target market described in the TMD.

ASIC identified four concerns. It says the target market in the TMD suggests that the Fund is suitable for:

• consumers with a medium to high risk and return profile
• consumers seeking capital preservation
• a portfolio allocation of up to 50% of a consumer’s investable assets, which ASIC considers inappropriate, and
• a timeframe for accessing capital that ASIC considers inappropriate.

What does the Fund invest in?

ASIC describes the Fund as investing in global bonds, global syndicated loans, global asset-backed securities (including commercial mortgage-backed securities and collateralised loan obligations, or CLOs), derivatives and cash. ASIC also notes that investors may be exposed to the risks of subordinated (or residual) CLO tranches. These are the lowest-ranking parts of a CLO and the first to absorb losses.

What does the stop order prevent?

While it is in force, the order stops Fidante from doing these things for retail clients:

• dealing in the Fund, including issuing Class A units
• giving a PDS for the Fund, and
• giving general financial product advice recommending an investment in the Fund.

ASIC’s release does not say how the order affects existing unitholders or redemptions. If you already hold units, check for updates from Fidante and speak to your financial adviser.

ASIC’s focus on private credit

ASIC Commissioner Simone Constant said the action is part of ASIC’s ongoing work on risks in private credit. She said ASIC will use its powers to “act swiftly to intervene early” where products may be reaching retail investors they were not designed for.

ASIC says its surveillance of private credit funds is looking at:

• how private credit funds are distributed to retail clients, both directly and through financial advisers, and
• fees, margin structures and how conflicts of interest are managed in wholesale private credit funds.

Expect more of this. Private credit is a clear ASIC priority, and stop orders are a fast and public tool.

What does this mean for fund issuers and distributors?

If you issue or distribute private credit, income or other alternative investment funds to retail clients, now is a good time to review your TMDs. In particular, check that:

• the risk and return profile matches what the fund actually invests in, including any exposure to lower-ranking or illiquid assets
• the TMD does not describe the fund as suitable for capital preservation unless that is realistic
• the suggested portfolio allocation (for example, a minor, satellite or core holding) reflects the fund’s risk and concentration
• the stated timeframe for accessing capital matches the fund’s redemption terms and the liquidity of its assets
• your distribution conditions, review triggers and reporting arrangements with platforms and advisers are working in practice.

Distributors, including advice licensees and platforms, also have DDO obligations. They must take reasonable steps to make sure their distribution is consistent with the TMD, and must report complaints and significant dealings outside the target market to the issuer. ASIC’s Regulatory Guide 274 and its guidance on DDO obligations for managed investment schemes set out what it expects.

If ASIC raises concerns with you, act quickly. In earlier matters, ASIC revoked interim stop orders after issuers amended their TMDs to address its concerns.

Frequently asked questions

Has ASIC found that Fidante broke the law?

No. This is an interim order based on ASIC’s concerns. Fidante can respond before ASIC decides whether to make a final stop order or revoke the order.

How long does an interim stop order last?

21 days, unless ASIC revokes it earlier. ASIC may also make a final stop order after a hearing.

Does the order apply to wholesale investors?

The DDO obligations only apply to products offered to retail clients, and the order targets dealings with retail clients. Wholesale private credit funds are still within ASIC’s wider surveillance, which looks at fees, margins and conflicts.

What is a target market determination?

A TMD is a document an issuer must prepare before distributing a financial product to retail clients. It describes the class of consumers the product is designed for, any conditions on how it can be distributed, and when the TMD must be reviewed. Our article on the $8 million American Express penalty for breaching its DDO obligations shows what can happen when TMDs and distribution go wrong.

Need help with your design and distribution obligations?

We help fund managers, responsible entities, lenders and other product issuers prepare and review TMDs, and respond to ASIC when it raises concerns about your DDO obligations. Learn more about our design and distribution obligations services.

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This article is general information only and is not legal advice. It reflects the law and information available at the date of publication. Please contact us for advice about your circumstances.