The Australian Prudential Regulation Authority sent a letter to approved deposit-taking institutions yesterday advising them that the capital treatment of loans to self-managed superannuation funds secured by residential mortgage may have a different loss profile to standard loans.APRA said that for the purposes of its capital adequacy standard, APS 112, SMSF loans are "relatively more complex" than standard mortgages."As such, SMSF loans may have a different and potentially higher loss profile in comparison to standard loans," APRA said.In support of its position, it pointed out that the super fund was not the owner of an asset purchased with borrowed funds; it was the beneficiary under a separate trust structure.Also, SMSF loans involve no recourse beyond the asset being funded.APRA also advised that it is an ADI's responsibility to ensure that "it has given detailed consideration to the particular risks of lending to a superannuation fund, and that its application process verifies all relevant compliance matters that might impact on the ability of the SMSF to service the loan."Regulators are taking a closer look at the SMSF loan market. In November, the Australian Taxation Office issued a notice to trustees of self-managed funds warning them that some borrowing arrangements did not meet the requirements of superannuation legislation.The ATO said that, in some cases, loans were arranged without the proper trust structures being in place, and, in others, the property title is held by a party that is not entitled to hold it.This heightened attention comes as more lenders are entering the SMSF market. AMP launched an SMSF loan in November, and State Custodians Mortgage launched one in December.The head of technical services for AMP's SMSF administration, Philip La Greca, said 15 per cent of AMP's SMSF clients had loans, of which half funded property investments.