The Australian Securities and Investment Commission (ASIC) seeks industry feedback on its proposal to extend financial reporting and annual general meeting (AGM) relief in order to reduce the regulatory burden for externally administered companies.
ASIC has proposed expanding the relief available under the ASIC Corporations (Externally-Administered Bodies) Instrument 2015/251 (LI 2015/251) to companies where a voluntary administrator, controller, or provisional liquidator is first appointed by:
Currently, LI 2015/251 grants a deferral of financial reporting obligations falling due within six months from the date of the first appointment of a relevant external administrator and any continuing financial reporting obligations that were due before the appointment of the relevant external administrator. However, it does not provide relief to extend the time in which an externally administered public company must hold an AGM.
Unless ASIC relief applies, externally administered companies must continue to meet financial reporting and AGM obligations.
If an externally administered company requires a longer financial reporting deferral relief period or an externally administered public company requires additional time to hold its AGM, it must apply to the regulator for individual relief and pay application fees.
ASIC Commissioner Cathie Armour said the regulator's proposal is timely as corporate insolvencies are expected to increase following the temporary COVID-19-related relief's withdrawal.
“The aim of the proposals is to provide financially distressed companies more breathing room to comply with their financial reporting and AGM obligations, while ensuring members continue to have access to other financial information about the externally administered company,” Armour said.
ASIC will accept submissions on CP 337 until March 11, 2021.
