A judge is set to rule on whether the Securities and Futures Commission (SFC) can probe the margin finance arm of a brokerage, sparking industry-wide repercussions. The SFC hotly argued its case for an inspection of Mansion House Capital documents yesterday, contending its link with brokerage Mansion House Securities was 'as close as could be'. As regulator of the securities industry, the SFC argues it should be allowed to inspect documents held by the margin finance arm which relate to Mansion House Securities. It was admitted yesterday by counsel for the watchdog, barrister Michael Bunting, that 'the request for documents stems from the commission's concern about linkage between brokerages and their related finance companies'. The documents sought - initially requested in 1997 as part of an SFC survey of margin lending - include statements of accounts of Mansion House Capital's top 15 loan accounts and account opening documentation for its 15 largest loan accounts. 'We are not accusing [Mansion House] Securities of anything,' Mr Bunting argued. 'They are not the subject of an investigation. We are probing,' he said. He offered an example of how close the two firms were. If staff from Mansion House Securities were aware of deficiencies in Mansion House Capital, clients they subsequently introduced to the margin finance arm should have been alerted to the dangers of continuing to use Mansion House Capital's facilities. 'Failure would constitute a basis for questioning the way business is conducted by Securities,' he said. Counsel for Mansion House, Gerard McCoy, argued that Mansion Capital was a separate entity, and there was a danger of the SFC conducting a 'fishing expedition' by requesting the documents. Mr Justice Conrad Seagroatt has reserved his decision, to be handed down at a later date.