Australia’s securities regulator has issued an interim stop order, preventing investment manager Fidante from issuing class A units in the Ares Global Credit Income Fund.

The Australian Securities and Investments Commission (ASIC) said Fidante had not met its design and distribution obligations and that the investment offering would “unlikely be consistent with the objectives, financial situation and needs of the retail client”.

“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,” said ASIC commissioner Simone Constant.

Ares’ credit fund holds $799.9m (£604.1m) in assets under management and invests in a portfolio of global bonds, syndicated loans, asset backed securities, derivatives, cash and cash equivalents.

The interim stop order is valid for 21 days and blocks Fidante from dealing in the private credit fund, giving a product disclosure statement, or giving advice to retail clients about the fund.

In particular, the regulator is concerned that the target market determination (TMD) of the fund is not appropriate because it suggests it is suitable for consumers with a medium to high risk and return profile and those seeking capital preservation. ASIC also disputes the level of portfolio allocation (up to 50 per cent of a consumer’s investable assets) and the timeframe for consumers to access capital.

Recently, ASIC has ramped up its intervention over risks it perceives in private credit markets.

Last week, it halted offers in three private credit funds managed by Australian Secure Capital Fund, while last month it banned three private credit products offered by Melbourne Securities Corporation.

The collapse of Sydney-based housing developer Bathla Group has also raised concerns over Australia’s A$200bn (£105.5bn) private credit market, with about 40 funds exposed to the company.