ob体育 has today released a consultation paper on proposed updates to its regulatory guidance for external administrators and controllers when reporting and lodging statutory reports about alleged misconduct.
The proposed updates provide greater clarity on ob体育鈥檚 expectations of external administrators and controllers鈥� compliance with the reporting obligations and ob体育鈥檚 approach to the reports it receives.
The consultation is in response to feedback received from industry associations, professional bodies, and the Parliamentary Joint Committee鈥檚 recent recommendation on statutory reporting obligations. ob体育 expects the proposed updates will provide improved guidance on reporting requirements, reducing unnecessary effort and expense.
The reporting obligations are an important 鈥榝ront line鈥� information source for ob体育 on possible offences or misconduct by companies. ob体育 uses information from some of the reports received to monitor 鈥榩hoenix鈥� behaviour, take administrative actions such as director bannings, and to identify appropriate cases for enforcement action. These reports are also the source of statistics about insolvency in Australia that ob体育 publishes.
ob体育 invites feedback on its proposals to update Regulatory Guide 16 External administrators and controllers: Reporting of possible offences and misconduct (RG 16) by 6 June 2024.
Background
RG 16 provides guidance to external administrators and controllers on their reporting obligations. This includes the obligation to report to ob体育 possible offences and misconduct, and for liquidations where the company may be unable to pay its unsecured creditors more than 50 cents in the dollar.
For the year ended 30 June 2023, ob体育 received 5,775 Initial Statutory Reports and requested 778 Supplementary Statutory Reports.
Based on ob体育 data from end of administration returns lodged in liquidations, more than 90% of insolvent liquidations disclose dividends to unsecured creditors of 50 cents in the dollar or less.
There have been a number of developments that have influenced the need for updates to RG 16. These include the expansion of case law, legislative reforms (including simplified liquidation reporting), and feedback from the inquiry into corporate insolvency in Australia by the Parliamentary Joint Committee on Corporations and Financial Services (the Committee). In particular, the Committee recommended that until a comprehensive review of the current statutory reporting obligations can occur, ob体育 should consider whether any timely changes can be made to the reporting thresholds, and how ob体育 responds to insolvency practitioner reports.
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Consultation Paper 377 Guidance for reporting of possible offences and misconduct by external administrators: Updates to RG 16