Time is up for stakeholders to have their say on proposed insolvency law reforms

Following the close of public submissions on Monday, it will be interesting to see stakeholder and industry responses to the proposed insolvency law reforms.

By way of refresher, in March this year, the Federal Government published draft legislation (Treasury Laws Amendments (2017 Enterprise Incentives No.2) Bill 2017) for consultation, seeking to amend the Corporations Act 2001 (Cth) by introducing:

• a ‘safe harbour’ carve out to a director’s personal liability for insolvent trading, and
• stay provisions affecting the enforceability of certain ‘ipso facto’ and other clauses during an administration or scheme of arrangement.

A new understanding between ASIC and the Takeovers Panel

A new memorandum of understanding (MOU) between the Takeovers Panel (the Panel) and ASIC was recently released, replacing the previous MOU signed in August 2001.

While the new MOU continues to reinforce the separate, but complementary roles of the Panel and ASIC (to regulate takeovers and control transactions), a comparison against the previous MOU shows a change in tone and approach between the two bodies.

The description of ASIC’s role has shifted from an almost exclusive focus on contravention to a broader outcomes based approach, recognising the need for greater facilitation of transactions at the same time as maintaining investor protections, together with further guidance on ASIC’s approach in exercising its discretion under the Corporations Act 2001 (Cth).