THE Rudd Government will give the $21 billion margin lending industry three weeks to digest a proposed overhaul of the regulatory and legislative regime.
The Minister for Corporate Law Nick Sherry will today release a draft copy of the legislation with a view to introducing it into parliament next month.
The legislation includes new national laws to regulate margin lending under a standard national regime, reports The Australian.
Margin lending is not currently regulated in Australia and is considered to have been one of the main destroyers of investor wealth as the stockmarket collapsed last year.
It cost some investors their homes as their margin lending accounts blew up, triggering margin calls many couldn’t afford to pay.
Mr Sherry said yesterday taking out equity on a family home was a key area of interest to the Government.
“One area where we have had a high level of concern has been where people have been advised to take equity out of their family home and then to use this debt to leverage into buying shares through a margin loan.
“This double-debt trap, with a home as security, is of serious concern,” he said.
“Under our new responsible margin lending laws the lender will be required to assess a person’s true loan-to-value ratio
“This means the lender can no longer assume the money brought to the table is not itself debt, a major new improvement” that would reduce the risk of people losing their homes.
Properly geared margin lending, backed by full disclosure, had a place, but the Rudd Government would not tolerate ordinary Australians being misled into grossly inappropriate margin loans that could cost a family everything they owned, including their home, he said.
Under the new laws, lenders will be regulated by the Australian Securities and Investments Commission and be required to hold an Australian Financial Services Licence, be members of low-cost external dispute bodies, clearly disclose fees and commissions before lending, and lend under a tailored margin-lending-specific set of responsible lending obligations.
Between June last year and December 30, the number of margin calls received by 205,000 Australians with margin loans increased 458 per cent, as the share market dropped 40 per cent.
http://www.news.com.au/perthnow/money/story/0,26926,25441887-5015860,00.html
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Housing Development on the Banks of the Moore River
Posted in Living in Perth, Local News, Realestate and Home Loans, tagged 15000 people., 2000, 2000 new homes., 6000 people, allowed, allowing, approved, area, build, Cabinet, comment, cut 60 per cent, cut by 60 %, decade, develop, developer, development, expected, forward, Gingin, go ahead, home, Homes, infrastructure, John Day, Living in Perth, Local News, major, Marcus Plunkett, Minister, Moore, moore river, much needed, needed, new, on the banks of the Moore River, Original plans, parliament, people, Planning Minister, plans, plans for approval, population, population of around, public, public comment, released, residential, revised, revised plan, river, shire, shire of Gingin, smaller, told, tourism, tourism development, trying, WA on June 11, 2009| Leave a Comment »
Finally after a decade of trying to get plans to develop on the banks of the Moore River, they have been given the go ahead to build 2000 new
homes.
Planning Minister John Day told parliament Cabinet had approved a smaller development that is allowing a population of up to 6000 people.
Original plans have been cut by 60 per cent which would have allowed a population of around 15000 people.
Marcus Plunkett the developer has said ” this will ensure that the shire of Gingin will have a major residential and tourism development which will bring much needed infrastructure to the area.”
This development will still need to put forward plans for approval, a revised plan is expected to be released for public comment.
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