An ASIC review has found that while registered liquidators are mostly doing the right thing when complying with their lodgement and publication obligations, there is room for improvement.
The review looked at around 26,000 insolvency administrations over a 3-year period to June 2017 and tested how registered liquidators complied with their obligations. ASIC found that 3.3% of required forms were not lodged and 7% of the required notices were not published.
While the overall percentage of non-lodgements was low, 70% of registered liquidators reviewed had at least one non-lodgement and were therefore not fully compliant with their obligations.
ASIC Commissioner John Price stressed why this information is important to ASIC.
“Registered liquidators are the custodians of other people’s money and any compliance failure can be a sign of wider systemic failure. By being fully compliant, registered liquidators contribute to maintaining the integrity of the market.”
The report includes detail on ASIC’s response when more systemic non-lodgement issues were identified. ASIC agreed to the registered liquidator engaging an independent party to undertake a quality review. These independent reviews provide both ASIC and the registered liquidator with a level of assurance that issues identified are not symptomatic of wider problems.
REP 573 Registered liquidators’ compliance with lodgement and publication requirements includes guidance for registered liquidators to assist them improve their practice management and efficiency regarding lodgement and publication compliance.
ASIC’s guidance to registered liquidators includes:
- it is the registered liquidators’ responsibility to ensure all aspects of external administrations are conducted properly;
- ongoing review and update of internal systems and procedures by registered liquidators is vital to ensuring compliance with lodgement and publication obligations; and
- registered liquidators must ensure they supervise staff and provide timely and regular education and training for their staff.