Submission to ASIC in response to report 392 ASICs deregulatory initiatives

ASIC’s Deregulatory Initiatives

On 18 June 2014 the Australian Institute of Company Directors provided a submission to ASIC in response to Report 391 – ASIC’s deregulatory initiatives. As part of the Report ASIC requested feedback on suggestions for regulatory change that ASIC might discuss further with Treasury and the Government. In summary, Company Directors’ comments were as follows:

• we are pleased that ASIC is considering ways to reduce red tape and to deliver compliance cost savings for regulated businesses;
• the reduction in red tape and the creation of a system of efficient regulation is a key element for boosting national productivity;
• to ensure that regulation of corporations and directors remains efficient, effective and contributes to national productivity, ASIC should recommend to the Government that:

1. a broad based defence for directors be inserted into the Corporations Act;
2. the Corporations and Markets Advisory Committee (CAMAC) be reinstated;
3. the thresholds for financial reporting be reconsidered;
4. greater flexibility for entities trying to change their financial year end be accommodated;
5. the reversal of the evidentiary onus of proof in section 12BB of the ASIC Act relating to forward looking statements be amended;
6. an environment that encourages the proliferation of class actions against corporations be re-visited and a tailored licensing regime for litigation funders be inserted into the Corporations Act and enforceable by ASIC.

• I regard to ASIC’s processes and forms we recommend that ASIC:

1. carefully consider the scope of its regulatory guidance, particularly Regulatory Guide 247 - Effective Disclosure in the Operating and Financial Review, as guidance such as this has the potential to add to the compliance burden for companies and directors;
2. make improvements to the auditor resignation requirements; and
3. facilitate the electronic completion and lodgment of all ASIC forms.