The Americans for Financial Reform Education Fund led a letter of 10 signers urging the Securities and Exchange Commission (SEC) to reject an application for a novel exchange traded fund (ETF) that would allow retail investors to invest in the $1.7 trillion private credit market.

The letter makes important points on how this private credit ETF is one of the many ways that the private fund industry is trying to sell assets, many of which they have been struggling to sell, to retail investors who have little visibility into the assets they are owning.

Several larger institutional investors have already taken losses in the private credit market and the letter warns how the presence of an institutional investment manager still fails to mitigate concerns around valuation, conflicts of interest, and suitability.