ASIC CONSULTS ON RELIEF FOR FINANCIALLY DISTRESSED COMPANIES AND REGISTERED MANAGED INVESTMENT SCHEMES
Earlier this year, ASIC released Consultation Paper 223 Relief for externally administered companies and registered schemes being wound up – RG 174 update (CP223) and a draft update to Regulatory Guide 174 Relief for externally administered companies and registered schemes being wound up (RG174). ASIC is proposing to update its approach for financial reporting relief for externally administered companies and registered schemes.
Proposals made in CP223
CP223 consults on proposed improvements to ASIC policy that may achieve a better balance between the information needs of members and other users of financial reports. In particular, ASIC sought public comments on proposals to reduce business costs for insolvent or financially distressed companies and registered schemes. Key points from CP223 include:
(a) a proposal to update ASIC’s approach to financial reporting relief for externally administered companies and registered schemes being wound up;
(b) establishing policy that appropriately balances the information needs of members and other users of financial reports due to the financial burden imposed on distressed entities by financial reporting costs; and
(c) consulting on potential practical improvements ASIC can make to test whether ASIC will achieve such an appropriate balance.
In particular, ASIC sought feedback on whether it should:
(a) exempt insolvent registered schemes being wound up from financial reporting;
(b) exempt public companies from the obligations to hold an AGM if the company has a liquidator appointed; and
(c) update its guidance on the circumstances in which ASIC will provide individual relief.
Submissions on CP223 closed on 20 October 2014. ASIC has indicated that it aims to finalise the updated RG147 and Class Order 03/392 by February 2015.
Should your company or registered managed investment scheme be facing insolvency or financial difficulty and you require further information, please contact us.
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