ASIC is set to undertake a wholesale review of the way it regulates the debenture industry following the collapse of Banksia Financial Group and Provident Capital.
The Australian Financial Review reports that the regulator will overhaul its regulation of the $4.5 billion debenture market, establishing an internal task force to probe the beleaguered sector.
According to the AFR, eight of the 15 largest debenture issuers identified as the riskiest by ASIC in 2007 have since collapsed.
As reported by Australian Broker, Banksia Financial last week had receivers appointed due to solvency fears, with $660m owed to investors.
Aggregators such as AFG and Vow Financial are currently dealing with loans that their brokers had either already settled with the group, or were in the midst of applying for on behalf of their clients.
ASIC is reportedly examining requirements which requires debenture issuers to disclose if they meet a set of suggested capital ratios, with no penalty attached if they are indeed uncercapitalised.