The Australian Securities and Investments Commission (ASIC) has announced an internal taskforce which will look at the failure of Victorian debenture issuer Banksia Securities.
The taskforce, which will be led from Melbourne by Commissioner John Price, will comprise business units from across ASIC and will review the regulator's work to date around the regulation of the unlisted debenture sector.
ASIC Chairman Greg Medcraft, who announced the taskforce, said the failure of Banksia would affect the lives of many everyday Australians.
"ASIC wants to take a closer look as it is another area of retail-funded shadow banking," he said. "The taskforce may involve making recommendations to Treasury about law reform, given we have pushed the existing conduct and disclosure to its limit."
The regulator will also work closely with Banksia receivers and managers McGrath Nicol to try and get "the best results" for investors and retail clients to whom Banksia provided credit.
"Importantly, we'll also continue to remind debenture trustees of their obligations as gatekeepers to protect investors and monitor debenture investments – particularly bad loans and liquidity problems," Medcraft said.
ASIC has recently conducted risk-based surveillances on a small number of debenture issuers, in addition to undertaking general market reviews into the Australia unlisted debenture market.
