wellington capital limited news, page-99

Merchant bankers have gone extinct



Scott Rochfort
February 10, 2012.

CBD
I
t could soon become known as Black Thursday around morning tea. The day when hundreds of ''merchant bankers'' had their identities mercilessly stripped off from them by the financial regulator.

The Australian Prudential Regulation Authority declared yesterday that it would ban 39 entities from calling themselves a ''merchant bank'', possibly making it the darkest day for people wanting to call themselves merchant bankers since the onset of the financial crisis.

APRA noted how it had for years allowed money market corporations to ''use the restricted word 'bank' only in the expressions 'merchant bank', 'merchant banker' and 'merchant banking'


But in a press release, the regulator decided it would now ban the use of the term. ''In its review, APRA found that the term 'merchant bank' had been overtaken in common language by the term 'investment bank', a term APRA does not allow unauthorised financial businesses to use,'' the regulator announced.

''Therefore, APRA believes the use of the term 'merchant bank' could cause confusion in the minds of the public when used by entities that are not authorised to carry on banking business in Australia,'' it said.

IDENTITY CRISIS

One entity hard hit by APRA's decision was Brisbane's ''boutique merchant bank'' run by Jenny Hutson, which is best known for its management of the bombed-out MFS-founded Premium Income Fund.


Read more: http://www.smh.com.au/business/merchant-bankers-have-gone-extinct-20120209-1rx4f.html#ixzz1lvPPyaej