ASIC reports on supervision of registered liquidators for 2016


ASIC today released its sixth annual report into the supervision of registered liquidators.

Report 532 ASIC regulation of registered liquidators: January to December 2016 details the supervisory, enforcement, stakeholder liaison, policy and educative work ASIC undertook in its commitment to continue improving regulation of the insolvency and restructuring sector.

John Price, ASIC

ASIC Commissioner John Price said:

We continue to build market trust and confidence in the profession and ASIC’s regulation through our supervision activities. Independence, competence and remuneration remain key focus areas for us.

While the majority of insolvency practitioners seek to do the right thing some practitioners flout the law and we are focused on them. In saying that, I don’t want to lose sight of the good work most registered liquidators do when companies fail, and we work closely with them on this front,’ he added.

Key points:

  • ASIC completed more than 50 reviews covering practitioner independence, competence and remuneration.
  • ASIC completed over 230 reviews as part of the ‘published notices and non-lodgment compliance’ project.
  • A total of 401 reports of alleged misconduct about registered liquidators were assessed in the review period.
  • 68% of reports of alleged misconduct against registered liquidators resulted in educative outcomes (following a misinterpretation of the law, for example) for those making the report.
  • ASIC maintained its enforcement focus, with strong outcomes demonstrating ASIC’s commitment to holding registered liquidators to account, such as:

– commencing six formal investigations
– commencing a CALDB action for one registered liquidator and a court inquiry for two registered liquidators
– entering into two enforceable undertakings, and
– reaching nine negotiated resolutions, seven of which were from our project work.

  • strong cross-government agency collaboration underpinning ongoing strategic and operational matters aimed at disrupting those who facilitate illegal phoenix activity.

ASIC’s report provides a comprehensive view of its activity in the insolvency market, including the work with registered liquidators in the event of company failure; and particularly through ASIC’s administration of the Assetless Administration Fund, the Liquidator Assistance Program and enforcement action against directors and others based on registered liquidator reports to ASIC.

In 2016, ASIC:

  • assessed more than 700 AA fund applications and approved more than 260 applications, and
  • assisted liquidators obtain books and records or RATA’s in more than 390 external administrations and prosecuted more than 370 directors for failing to assist registered liquidators.

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