Local fund may take up Rudd's lifeline
A LOCAL investment fund is considering restructuring itself to take advantage of the lifeline the Federal Government threw banks when it guaranteed deposits two weeks ago.
Prime Minister Kevin Rudd has urged managed funds to put themselves under the control of the Australian Prudential Regulatory Authority (APRA), which would let them be covered by the deposit guarantee.
Mayne Investments Lismore general manager Greg Andersen said that rather than trying to bring funds under stricter financial guidelines, he believed the Prime Minister was trying to draw a distinction between a bank deposit and an investment.
As for the prospect of becoming a bank under the APRA regime, Mr Andersen said Mayne Investments would be seeking more detail regarding APRA's requirements.
“We are not dismissing it out-of-hand,” he said. “However, it would appear that it might be a lot more difficult.
“We might meet some of the guidelines in most areas of our operations, but because we are a mortgage fund we have been distributing our profits rather than retaining some of the earnings like the banks do,” Mr Andersen said.
“The initial reaction from others in the industry I have spoken to is that it is probably not possible, and certainly not in a short time.”
Opposition Leader Malcolm Turnbull said Prime Minister Kevin Rudd must regret the decision to rush the bank guarantee scheme because it created a mess.