Mackay Chapman November 2026 Regulatory Roundup
Key developments
- ASIC intensifies scrutiny of private credit following the Bathla collapse and intervenes in two investment products.
- AUSTRAC begins issuing infringement notices to businesses that failed to enrol under the expanded AML/CTF regime.
- AUSTRAC updates its guidance on threshold transaction reporting.
- The ATO announces it will no longer accept credit card payments after 30 November 2026.
- Large corporate tax compliance improves, with the ATO reporting $87.5 billion in corporate income tax paid.
- APRA and the Reserve Bank of New Zealand complete a major joint stress test of the trans-Tasman banking system.
ASIC
ASIC intensifies private credit scrutiny following Bathla collapse
The collapse of the Bathla Group has sharpened ASIC's concerns about Australia's rapidly growing private credit sector.
In a recent speech on private credit standards, ASIC Commissioner Simone Constant warned that governance, controls and underwriting standards had failed to keep pace with the sector's growth.
ASIC has been raising concerns about private credit for some time. The Bathla collapse has brought those concerns into sharper focus, particularly the risks associated with complex property lending structures and distressed developments.
ASIC identified several areas requiring improvement across the sector:
- Loan valuations and recognition of impaired assets.
- Liquidity management and investor redemption arrangements.
- Conflicts of interest and related-party structures.
- Transparency of fees, underlying assets and borrower exposures.
- Governance and independent oversight of lending decisions.
The regulator expects private credit participants to assess their practices against its ten principles for private credit. It has also challenged the sector to lift standards by 2027.
Recent regulatory intervention demonstrates that ASIC is prepared to act where it identifies concerns.
Fidante Partners — target market concerns
ASIC issued an interim stop order against Fidante Partners Limited concerning Class A units in the Ares Global Credit Income Fund.
ASIC was concerned that the fund's target market determination did not adequately reflect its risks or the needs of the retail investors for whom it was intended.
Its concerns included descriptions of the product as suitable for capital preservation, the level of portfolio allocation considered appropriate and the timeframe for investors to access their capital.
At 30 June 2026, the fund had approximately $799.9 million in assets under management.
The interim order was revoked on 21 October after Fidante amended its target market determination. The changes included removing capital preservation as a suitable investment objective and reducing the portfolio allocations considered appropriate.
Australian Secure Capital Fund — disclosure concerns
ASIC also issued an interim stop order affecting three mortgage investment schemes managed by Australian Secure Capital Fund Limited.
The schemes held approximately $251.8 million in assets under management at 30 June 2026.
ASIC raised concerns about deficiencies in the product disclosure statement. These included inadequate disclosure of loan portfolios, diversification, early withdrawal costs and an investor reserve account intended to cover losses.
The interim order was revoked on 19 October after the company amended its disclosure documents.
Both matters demonstrate ASIC's willingness to intervene before identified disclosure and distribution risks result in further investor harm.
Remaining in ASIC’s sights
The industry remains in ASIC’s sights in early November with ASIC issuing interim stop orders preventing Angas Securities Limited from offering, issuing, selling, or transferring interests in the Angas Prime Income Fund (ARSN 091 887 400) and the Angas Direct Mortgage Fund (ARSN 151 979 645) due to concerns the funds’ product disclosure statements (PDSs) do not adequately disclose Angas Securities’ financial position and one fund’s exposure to the Bathla Group.
Alongside this the AFR reports that a second major ASIC surveillance into private credit markets and operators in the last two years will report next Tuesday, finding serious issues and deficiencies remain. It will report that the industry’s practices remain too opaque and too complicated with significant returns being generated for fund operators over and above disclosed management fees and significant related party transactions.
The timing of the report, the significance of the issues described and the tone of media conducted by ASIC commissioner Simon Constant signals clearly that private credit will be an enforcement priority in 2027. Commissioner Constant confirmed a formal ASIC investigation is now underway into Bathla and that inquiries were on foot with a number of other specific lenders.
ASIC Chair Sarah Court will announce 2027 Enforcement Priorities in a speech at the ASIC Annual Forum on 18 November 2026. Expect private credit to be front and centre.
AUSTRAC
AUSTRAC begins issuing infringement notices under expanded AML/CTF regime
AUSTRAC has moved from education and warnings to enforcement against businesses that have failed to enrol under Australia's expanded anti-money laundering and counter-terrorism financing regime.
The regulator has commenced issuing infringement notices to businesses it believes failed to meet their enrolment obligations.
The notices follow formal information requests sent in August to businesses suspected of providing designated services without being enrolled.
AUSTRAC says the initial notices were issued to businesses in the real estate, accounting and jewellery sectors.
The penalties were $21,840 for corporate entities and $4,368 for individuals. Further penalties may accrue for continuing non-compliance.
The expanded AML/CTF regime commenced on 1 July 2026. It brought additional businesses in legal services, accounting, real estate, conveyancing, trust and company services and precious metals and stones within the regulatory framework.
AUSTRAC reported that approximately 90% of the businesses initially contacted had subsequently enrolled or attempted to enrol.
However, it has warned that further enforcement action will follow where businesses continue to ignore their obligations.
Enrolment is only the first step. Businesses must also understand which designated services they provide, assess their money laundering and terrorism financing risks and implement appropriate compliance controls.
For newly regulated professional services businesses, the latest action confirms that AUSTRAC expects practical compliance with the expanded regime.
AUSTRAC clarifies threshold transaction reporting obligations
AUSTRAC has updated its guidance on threshold transaction reports, providing further clarity on when businesses must report transactions involving physical currency.
Under the AML/CTF framework, reporting entities must submit a threshold transaction report when they provide a designated service involving a transfer of $10,000 or more in physical currency, or the foreign currency equivalent.
The updated guidance explains that the obligation is tied to the receipt or payment of physical notes and coins.
Electronic transfers, card payments and cheques do not themselves trigger threshold transaction reporting, even where the amount exceeds $10,000.
AUSTRAC has also added examples covering transactions that involve both physical currency and other payment methods.
The clarification is relevant to businesses handling cash transactions and those developing their compliance systems under the expanded regime.
It is particularly important that businesses distinguish threshold transaction reporting from their separate obligations to identify and report suspicious activity.
ATO
ATO to stop accepting credit card payments after 30 November 2026 - correction, 30 June 2027
Businesses that rely on credit cards to manage tax payments will need to make alternative arrangements before the end of the financial year. The change was due to take effect by 30 November but after sustained political pressure on the Federal government, the ATO has revised the transitional period. November.
The ATO has announced the extension of the transition period and that it will now stop accepting credit card payments after 30 June 2027.
The decision to cease accepting credit cards follows the Reserve Bank of Australia's review of merchant card payment costs and surcharging.
The ATO says it would not be appropriate for the cost of credit card merchant fees to be transferred to the wider community.
Credit cards accounted for approximately 2.3% of tax payments in 2024–25. However, more than 60% of those card payments were made by privately owned and wealthy groups and public and multinational businesses.
The change may therefore have a greater impact on some business taxpayers than the overall payment figures suggest.
The ATO is contacting taxpayers with payment plans linked to credit cards.
Those affected will need to update their payment method before the transition period ends. Other payment methods will remain available.
For businesses already managing cash flow pressures or substantial tax liabilities, the change is worth addressing early to avoid missed payments or problems with existing payment arrangements.
Large corporate tax compliance improves as ATO reports $87.5 billion in tax paid
Australia's largest companies are showing stronger tax compliance, according to the ATO's latest corporate tax transparency report.
The 2024–25 report covers 4,299 corporate entities that together paid $87.5 billion in corporate income tax.
The ATO reported that 94.3% of tax was paid voluntarily by large businesses. This increased to 96.3% following ATO compliance activity.
The proportion of large corporates paying no income tax fell to 27%, its lowest level since corporate tax transparency reporting began.
The ATO cautioned that a nil tax result does not necessarily indicate wrongdoing. Some businesses legitimately pay no income tax due to their financial circumstances and applicable tax rules.
Mining remained the largest contributor to corporate income tax, although weaker commodity prices affected profitability.
The report also highlights the ongoing impact of the ATO's Tax Avoidance Taskforce.
Since its establishment in 2016, the Taskforce has secured more than $36 billion in additional tax revenue from multinational enterprises and large public and private businesses.
The ATO continues to focus on related-party financing, international tax arrangements and other areas where complex corporate structures can create compliance risks.
The latest figures indicate improving compliance across the large corporate sector. They also demonstrate the continuing scale of the ATO's assurance and enforcement work.
APRA
APRA and RBNZ stress test finds trans-Tasman banks resilient to severe downturn
Australia and New Zealand's banking systems have demonstrated resilience under a severe hypothetical economic downturn.
The exercise examined how participating banks would respond to significant economic and financial disruption affecting both countries.
The scenario included:
- Escalating geopolitical tensions and a sharp increase in oil prices.
- A deep recession across Australia and New Zealand.
- Falling property values and rising unemployment.
- Pressure on bank capital and liquidity.
- Disruption to funding markets.
- A cyberattack affecting an offshore banking operation.
The test found that participating banks would remain resilient despite substantial losses and pressure on funding and capital.
Importantly, banks were assessed as capable of continuing to provide credit to households and businesses throughout the hypothetical stress period.
The exercise also examined the connections between major Australian banks and their New Zealand subsidiaries.
Those relationships are significant given New Zealand's four largest banks are subsidiaries of Australia's major banks.
APRA and RBNZ will use the results to inform future supervision, crisis management and stress testing.
The findings are reassuring for financial stability. However, they are based on a modelled scenario rather than a prediction of how any particular downturn will unfold.
The results also reinforce the importance of coordinated supervision where financial institutions operate across jurisdictions.
What does this mean for businesses?
Across these developments, regulators are placing increasing emphasis on effective governance, transparency and compliance systems that work in practice.
For boards, business owners and professional advisers, the challenge is not simply having the right policies in place. It's being able to demonstrate that risks are being identified, decisions are properly documented and regulatory obligations are being met.
That means recognising potential problems early and addressing them before they become more serious, including taking proactive remedial action and early regulatory engagement where appropriate.
The contents of this update do not constitute legal advice, are not intended to be a substitute for legal advice, and should not be relied upon as such. They are designed and intended as general information in summary form, current at publication, for general informational purposes only. You should seek legal or other professional advice concerning any particular legal matters you or your organisation may have.
