KEY POINTS:
The Securities Commission is asking finance companies for proof of their financial health but will not say whether it will share the results with investors.
The commission wrote last week to all finance firms seeking confirmation that their prospectuses were still legitimate "given recent failures".
Yesterday, the commission's acting chairman, Colin Beyer, said: "It is important to investors that the information they receive from finance companies is up to date and accurate, so that they can assess the risks and returns of the investment before they make decisions about investing."
Forty-nine companies were given until Wednesday to respond, and a further 18 were given until today.
Five Star Consumer Finance, revealed yesterday as the seventh finance company to fail in the past 16 months, was the only one of the initial 49 that did not respond.
The commission said it would provide an update once all responses had been received.
Its letter, only publicly disclosed on Wednesday by general counsel Liam Mason in an interview with Radio New Zealand, follows a similar one from sharemarket operator New Zealand Exchange to all listed finance companies last week.
Mason declined to speak to the Business Herald yesterday. A spokeswoman said the commission had not sought to downplay the move, "but we don't want to panic the market".
Asked whether the commission was satisfied with the responses so far, she said: "We're still looking at it so we can't say anything."
Several prominent industry figures have called for immediate Government action to restore confidence to the $16 billion sector.
Commerce Minister Lianne Dalziel said the Government was already working on a new regulatory framework, albeit one that would not take full effect for another three years.
"Aside from the actions being taken by the independent regulators," she said, "the Government's current assessment is that no intervention is warranted at this stage."
Report Cards
* The Securities Commission has asked all finance companies to give assurances on their financial health.
* It is concerned the investor rout resulting from recent failures may affect some firms' liquidity and their prospectuses may now be out of date.
* Finance companies may not legally accept money from investors unless their prospectuses represent their true financial position.
