The Collapse of Unlisted Mortgage Companies: A Regulatory Dilemma

Monica Keneley, Graeme Wines, Ameeta Jain, (2017) "The Collapse of Unlisted Mortgage Companies: A Regulatory Dilemma", Accounting Research Journal, Vol. 30 Issue: 1, doi: 10.1108/ARJ-12-2014-0108

27 Pages Posted: 11 Jul 2017  

Monica Keneley

Deakin University

Graeme Wines

Deakin University

Ameeta Jain

Deakin University - Faculty of Business and Law

Date Written: Januray 20, 2017

Abstract

Purpose
Policy issues associated with the regulation of the unlisted debenture market have been highlighted in recent times with the collapse of a number of regionally based mortgage companies. The purpose of this paper is to analyse the decline and demise of the unlisted debenture market between 2007-2013 with particular reference to the effectiveness of the regulatory regime in stabilising the industry and protecting investors’ interests.

Design/methodology/approach
A database was constructed which reflected the total population of unlisted mortgage companies in the financial sector. A snapshot approach was used to assess the extent to which these companies complied with regulatory provisions.

Findings
Findings suggest the regulatory process allowed these companies to continue operating despite not complying with the relevant Australian Securities and Investment Commission (ASIC) benchmarks. In the light of the current inquiry into the financial system, the research suggests that a re-evaluation of the regulatory approach is timely.

Research limitations/implications (if applicable)
This research is restricted to study of one category of debenture issuers (issuers of mortgage finance). It is based on reports required by regulatory authorities. It does not provide an analysis of the motivations of investors in these companies. This maybe a direction for future research. This may provide clearer picture of the impact of the demise of these companies particularly in regional areas.

Practical implications (if applicable)
This research has implications for the implementation of regulatory change in respect to oversight of shadow banking activities. It suggested that a passive approach to regulation is not sufficient to ensure that the interests of investors are fully protected.

Suggested Citation

Keneley, Monica and Wines, Graeme and Jain, Ameeta, The Collapse of Unlisted Mortgage Companies: A Regulatory Dilemma (Januray 20, 2017). Monica Keneley, Graeme Wines, Ameeta Jain, (2017) "The Collapse of Unlisted Mortgage Companies: A Regulatory Dilemma", Accounting Research Journal, Vol. 30 Issue: 1, doi: 10.1108/ARJ-12-2014-0108. Available at SSRN: https://ssrn.com/abstract=2994486

Monica Keneley (Contact Author)

Deakin University ( email )

Burwood, Victoria 3215
Australia

Graeme Wines

Deakin University ( email )

75 Pigdons Road
Victoria, Victoria 3216
Australia

Ameeta Jain

Deakin University - Faculty of Business and Law ( email )

Burwood, Victoria 3215
Australia

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