Submission on proposed changes to RG16 Guidance for reporting by external administrators
Our members, who are also registered liquidators, greatest concern is ASIC's expectation for reports to be lodged in timeframes significantly shorter than provided for in legislation.
Overall, our members consider the changes will have little impact on their processes and do provide clarity around some of ASIC’s expectations. However, the proposed changes also raise concerns where ASIC’s expectations are contrary to a liquidator’s statutory obligations.
Level of investigation
While acknowledging that the extent of investigation undertaken will be constrained by the available resources, ASIC still require core reports to be filed irrespective of available resources.
We called for ASIC to provide a guide of what may be included in the initial statutory report (ISR) where there are no funds available, some funds available and adequate funds available.
Reporting timeframes
While an ASIC expectation is not legally enforceable, ASIC Regulatory Guides do form part of the regulatory framework and members consider them a benchmark they must achieve.
We seek for any reference to timeframes within the RG to reflect statutory requirements. Where ASIC would value shorter timeframes, that ASIC ‘encourage’ rather than ‘request’ or ‘expect’ lodgement in their preferred period.
Funding for investigations
The Assetless Administration Fund (AAF) is a grant that can fund investigations by external administrators where there are no funds left in a company. Our members hesitate to utilise the funding due to the complexity of the application and uncertainty of the outcome. In particular, where a government body or ASIC themselves have requested the liquidator seek funding to undertake further investigations, despite there being no greater certainty of the outcome.
We seek consideration for a field in the application form to indicate if the application is at the direction of a government body and, if so, that there is a positive obligation to approve unless there are significant failings in the application.
Conclusion
We consider there are areas where the guidance could be further clarified by including explicit examples of expectations and that ASIC would value statutory reports being submitted as soon as practicable.
