State Street (STT) and Apollo Asset Management's new private credit fund is under scrutiny by US government regulators for lacking sufficient liquidity and risk management controls and having a misleading name, according to a letter Thursday from the Securities and Exchange Commission.

The SEC's investment management division asserted in the letter, which was made public in a regulatory filing, that there remained "significant remaining outstanding issues" regarding the SPDR SSGA Apollo IG Public & Private Credit exchange-traded fund.

The Financial Times reported that the fund is meant to allow retail investors to buy into private credit assets previously available only to institutions.

The SEC questioned how the fund would maintain sufficient liquidity, given the illiquid nature of corporate bonds, and value the debt instruments into which it is investing.

The regulator also asserted that including Apollo's name in the fund was potentially misleading because the asset manager "does not have a contractual obligation to identify and make available (or offer) any investment for the fund to buy."

State Street and Apollo did not immediately reply to MT Newswires' request for comment.