The Assistant Treasurer has released a Consultation Paper today which proposes a “user pays” model for ASIC, including provision for liquidators to bear the costs of their own regulation via:
- a flat levy; or
- a levy calculated based on the value of assets realised (akin to the “realisations charge” currently levied on bankruptcy realisations); or
- a levy based on the number of appointments (new and ongoing) undertaken each year.
The Consultation Paper notes that a flat levy on the 700 registered liquidators in Australia would lead to recovery of around $9 million in 2016-17. This would, in part, cover the costs of the services provided by ASIC, which include:
- providing guidance to registered liquidators on ASIC’s expectations in relation to specific issues and behaviours;
- undertaking proactive risk-based surveillance, reactive surveillance, and compliance projects; and
- taking enforcement action to punish breaches of the law.
ARITA, the industry body representing (among others) liquidators, has this afternoon foreshadowed a “thorough and comprehensive” submission to Treasury on the proposal, and has sought preliminary input from its members, including ERA Legal’s insolvency experts.
For more information, please contact ERA Legal.