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ASIC releases guidance on insolvency reforms

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The Australian Securities and Investments Commission has released policy guidance on its power to wind up an abandoned company under new powers contained in the Corporations Act 2001.

ASIC has also updated its guidance on ASIC’s approach to, and criteria for, funding liquidator investigations, reports and actions from the Assetless Administration Fund (AA Fund).

Deputy chairman Belinda Gibson (pictured) believes the release of today’s policy guidance provides clarity to insolvency practitioners and those impacted by corporate insolvencies about how ASIC will use its new powers to apply the funds in the AA Fund to the best effect.

“The provision of guidance about how we will use our power to wind up companies is important to assist employees of companies that have gone into liquidation and who are owed certain employee entitlements.

“We are making clear our approach to facilitating access for employees affected by corporate failures to the Federal Government’s General Employee Entitlements Redundancy Scheme (GEERS).

“We have also taken the opportunity to expand our policy to address the use of the AA Fund to assist liquidators wishing to pursue a recovery action where they suspect fraudulent or unlawful phoenix activity. This will further increase the transparency of our approach to enforcement,” says Gibson.

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