ASIC RG 258 — ASIC Regulatory Guide – RG 258 Registered liquidators: Registration, ongoing obligations, disciplinary actions and insurance requirements

Page 1 REGULATORY GUIDE 258 Registered liquidators: Registration, ongoing obligations, disciplinary actions and insurance requirements October 2024 About this guide This guide is for individuals who are or wish to become registered liquidators under Sch 2 to the Corporations Act. This guide explains how to apply for registration as a liquidator, including the requirements that must be met to become a registered liquidator. This guide also explains the rongoing obligations of a registered liquidator, the disciplinary and other actions a registered liquidator may be subject to, and our policy on adequate and appropriate insurance. Page 2 RG 258: Registered liquidators: Registration, ongoing obligations, disciplinary actions and insurance requirements © Australian Securities and Investments Commission October 2024 Page 2 About ASIC regulatory documents In administering legislation ASIC issues the following types of regulatory documents. Consultation papers: seek feedback from stakeholders on matters ASIC is considering, such as proposed relief or proposed regulatory guidance. Regulatory guides: give guidance to regulated entities by:  explaining when and how ASIC will exercise specific powers under legislation (primarily the Corporations Act)  explaining how ASIC interprets the law  describing the principles underlying ASIC’s approach  giving practical guidance (e.g. describing the steps of a process such as applying for a licence or giving practical examples of how regulated entities may decide to meet their obligations). Information sheets: provide concise guidance on a specific process or compliance issue or an overview of detailed guidance. Reports: describe ASIC compliance or relief activity or the results of a research project. Document history This guide was issued in October 2024 and is based on legislation and regulations as at the date of issue. Previous versions:  Superseded Regulatory Guide 258 Registered liquidators: Registration, disciplinary actions and insurance requirements, issued March 2017  Superseded Regulatory Guide 186 External administration: Liquidator registration, issued September 2005 and rebadged as a regulatory guide 5 July 2007, withdrawn March 2017  Superseded Regulatory Guide 194 Insurance requirements for registered liquidators, issued June 2008, withdrawn March 2017  Superseded Information Sheet 34 How to apply for registration as a liquidator (Liquidator registration kit), issued September 2005, withdrawn March 2017  Superseded Information Sheet 59 Registration of official liquidators, issued as a webpage July 2002, issued as INFO 59 July 2007 and reissued May 2016, withdrawn March 2017 Disclaimer This guide does not constitute legal advice. We encourage you to seek your own professional advice to find out how the Corporations Act as amended by the Insolvency Law Reform Act 2016, the Insolvency Practice Rules (Corporations) 2016 and other applicable laws apply to you, as it is your responsibility to determine your obligations. Examples in this guide are purely for illustration; they are not exhaustive and are not intended to impose or imply particular rules or requirements. Page 3 RG 258: Registered liquidators: Registration, ongoing obligations, disciplinary actions and insurance requirements © Australian Securities and Investments Commission October 2024 Page 3 Contents A Overview ........................................................................................... 5 The role of registered liquidators ....................................................... 5 Limited or unlimited registration ......................................................... 5 Becoming a registered liquidator ....................................................... 6 Ongoing obligations of registered liquidators .................................... 8 Disciplinary and other actions ............................................................ 9 Insurance requirements ................................................................... 10 B Applying to be registered to act as an external administrator of companies, receiver and receiver and manager ........................ 11 Unlimited or limited registration ....................................................... 11 Eligibility requirements ..................................................................... 12 Qualifications ................................................................................... 14 Experience ....................................................................................... 15 Capacity ........................................................................................... 17 Fit and proper .................................................................................. 19 Resident in Australia or another prescribed country ....................... 25 Lodging your application for registration .......................................... 25 Processing your application ............................................................. 26 C Applying to be registered to act only as a restructuring practitioner for a company or of a restructuring plan ............... 30 Unlimited or limited registration ....................................................... 30 Eligibility requirements ..................................................................... 31 Qualifications, experience, knowledge and abilities ........................ 32 Capacity ........................................................................................... 33 Fit and proper .................................................................................. 34 Resident in Australia or another prescribed country ....................... 35 Lodging your application for registration .......................................... 35 Processing your application ............................................................. 35 D Applying to be registered to act only as a receiver and receiver and manager .................................................................................. 36 Unlimited or limited registration ....................................................... 36 Eligibility requirements ..................................................................... 37 Qualifications ................................................................................... 37 Experience ....................................................................................... 37 Capacity ........................................................................................... 39 Fit and proper .................................................................................. 40 Resident in Australia or another prescribed country ....................... 40 Lodging your application for registration .......................................... 41 Processing your application ............................................................. 41 E Ongoing obligations of registered liquidators ........................... 42 Maintain the qualifications, experience, knowledge and abilities required of a registered liquidator .................................................... 42 Maintain adequate and appropriate insurance ................................ 44 Comply with any current condition imposed on your registration .... 44 Comply with provisions of the Corporations Act and other relevant law .................................................................................................... 46 Adequately and properly perform the duties of a liquidator and any other duties or functions required under the law ............................. 47 Remain a fit and proper person ....................................................... 48 Page 4 RG 258: Registered liquidators: Registration, ongoing obligations, disciplinary actions and insurance requirements © Australian Securities and Investments Commission October 2024 Page 4 Renew your registration ................................................................... 49 Lodge an annual liquidator return .................................................... 51 Notify ASIC of changes .................................................................... 51 F Disciplinary and other actions ..................................................... 54 Our approach to assessing compliance .......................................... 54 ASIC direction to comply ................................................................. 55 Cancellation or suspension of registration....................................... 56 Show-cause notice .......................................................................... 58 Referral to a committee ................................................................... 63 Interaction with industry bodies ....................................................... 66 Court supervision ............................................................................. 68 Liquidator initiated actions ............................................................... 69 G Insurance requirements ................................................................ 75 Overview of our policy ..................................................................... 75 Introduction to the insurance requirements ..................................... 77 Our approach to administering the insurance requirements ........... 79 Assessing and obtaining insurance ................................................. 80 Adequate and appropriate PI insurance .......................................... 85 Fidelity insurance ............................................................................. 89 Previous business, former principals and run-off cover .................. 94 Appendix: Minimum insured amounts for PI insurance cover ......... 96 Key terms ............................................................................................... 97 Related information ............................................................................. 102 Page 5 RG 258: Registered liquidators: Registration, ongoing obligations, disciplinary actions and insurance requirements © Australian Securities and Investments Commission October 2024 Page 5 A Overview Key points To become a registered liquidator, you must demonstrate to a committee that you meet the statutory requirements for registration: see RG 258.5– RG 258.10 and Section B, C or D. As a registered liquidator: • you have ongoing obligations while registered (see RG 258.17– RG 258.19 and Section E); • your registration will cease unless you renew it (see RG 258.20 and Section E); • you may be subject to disciplinary or other actions (see RG 258.21 and Section F); and • you must maintain adequate and appropriate professional indemnity and fidelity insurance (see RG 258.23 and Section G). The role of registered liquidators RG 258.1 Registered liquidators act in a fiduciary capacity—they often have total management control of the affairs, money and other property of an externally administered company and, in some cases, they are officers of the court. They are required to maintain the utmost professionalism, independence, impartiality, honesty and ethics in the performance of their functions and duties. Note: For the definition of ‘court’ in this guide, see the key terms. RG 258.2 ASIC and the public must have confidence that individuals registered as liquidators under s20-30 of Sch 2 to the Corporations Act 2001 (Corporations Act) are capable of undertaking the work that a registered liquidator is empowered to perform, and that they are fit and proper persons to undertake such work. Note: Except where otherwise indicated, references in this guide to s20-30 (for example) are to a section of Sch 2 to the Corporations Act (in this example numbered 20-30). Schedule 2 to the Corporations Act is titled ‘Insolvency Practice Schedule (Corporations)’. Limited or unlimited registration RG 258.3 An individual can apply for a limited or unlimited registration as a liquidator. An unlimited registration allows the liquidator to practise without Page 6 RG 258: Registered liquidators: Registration, ongoing obligations, disciplinary actions and insurance requirements © Australian Securities and Investments Commission October 2024 Page 6 limitations on the type of appointment they can take. A liquidator with a limited registration may only: (a) act as a restructuring practitioner for a company or a restructuring practitioner of a restructuring plan; or (b) act as a receiver and receiver and manager. Note: If a person is registered to practise only as a receiver and receiver and manager or only as a restructuring practitioner, that limitation will be a condition imposed on the individual’s registration. RG 258.4 The Corporations Act defines an ‘external administrator’ of a company as the: (a) administrator of the company; (b) administrator under a deed of company arrangement (DOCA) that has been entered into in relation to the company; (c) restructuring practitioner for the company; (d) restructuring practitioner for a restructuring plan that has been made in relation to the company; (e) liquidator of the company; or (f) provisional liquidator of the company (s5-20). Note: A person is not an external administrator of a company for the purposes of Sch 2 merely because the person has been appointed as a receiver, receiver and manager or controller in relation to the property of the company. Becoming a registered liquidator Applications other than by New Zealand insolvency practitioners RG 258.5 An individual may apply to ASIC to be registered as a liquidator: s20-5. RG 258.6 To apply to be registered to act: (a) as an external administrator of companies, receiver and receiver and manager, refer to Section B; (b) only as a restructuring practitioner for a company or a restructuring practitioner of a restructuring plan, refer to Section C; or (c) only as a receiver and receiver and manager, refer to Section D. RG 258.7 Sections B, C and D describe the application process in detail. Note: There is a fee for lodging an application for registration as a liquidator under s20-5. For the current fee, see Information Sheet 30 Fees for commonly lodged documents (INFO 30). Page 7 RG 258: Registered liquidators: Registration, ongoing obligations, disciplinary actions and insurance requirements © Australian Securities and Investments Commission October 2024 Page 7 RG 258.8 If the application is properly made, ASIC must refer the application to a committee for consideration. The committee will decide whether the applicant should be registered as a liquidator and, if so, whether the applicant’s registration should be subject to any conditions. RG 258.9 ASIC must register an applicant if the committee has decided the applicant should be registered and the applicant produces evidence in writing that they have taken out adequate and appropriate professional indemnity (PI) and fidelity insurance. Note: There is a fee when ASIC registers a person as a liquidator under s20-30. For the current fee, see INFO 30. RG 258.10 An applicant that is not satisfied with the committee’s decision may apply to the Administrative Review Tribunal (ART) for a review of the decision. Note: A review by the ART is a de novo hearing. This means that the ART decides whether the application should be granted rather than reviewing the committee’s decision. RG 258.11 As a committee is a separate entity from ASIC, we cannot provide substantive guidance that committees must follow as committees make their own decisions. To provide an indication of the matters that committees may consider, we based our commentary on committee decisions. Notice to be registered by New Zealand insolvency practitioners RG 258.12 Under the Trans-Tasman Mutual Recognition Act 1997 (TTMR Act), an insolvency practitioner registered in New Zealand is entitled to registration in Australia. The TTMR Act provides that a New Zealand insolvency practitioner is entitled to registration as if the law of Australia expressly provides that registration in New Zealand is a sufficient ground of entitlement to registration in Australia. RG 258.13 A New Zealand insolvency practitioner who wishes to be registered as a liquidator in Australia may lodge a notice with ASIC by email to LiquidatorRegistrationProofs@asic.gov.au. The notice must: (a) state that the person is registered for the occupation in New Zealand; (b) state the occupation for which registration is sought and that it is being sought in accordance with the Trans‑Tasman mutual recognition principle; (c) specify all the participating jurisdictions in which the person has substantive registration for equivalent occupations; (d) state that the person is not the subject of disciplinary proceedings in any participating jurisdiction (including any preliminary investigations or action that might lead to disciplinary proceedings) in relation to those occupations; Page 8 RG 258: Registered liquidators: Registration, ongoing obligations, disciplinary actions and insurance requirements © Australian Securities and Investments Commission October 2024 Page 8 (e) state that the person’s registration in any participating jurisdiction is not cancelled or currently suspended as a result of disciplinary action; (f) state that the person is not otherwise personally prohibited from carrying on any such occupation in any participating jurisdiction, and is not subject to any special conditions in carrying on that occupation, as a result of criminal, civil or disciplinary proceedings in any participating jurisdiction; (g) specify any special conditions to which the person is subject in carrying on any such occupation in any participating jurisdiction; and (h) give consent to the making of inquiries of, and the exchange of information with, the authorities of any participating jurisdiction regarding the person’s activities in the relevant occupation or occupations or otherwise regarding matters relevant to the notice. RG 258.14 ASIC is the local registration authority with the responsibility for considering an application by a New Zealand insolvency practitioner for registration as a liquidator in Australia. This is because ASIC is the authority in Australia that has the function conferred on it by legislation of registering persons to act as a liquidator under s20-20 of Sch 2 of the Corporations Act. RG 258.15 ASIC can impose conditions on registration, but not more onerous than those which would be imposed in similar circumstances (having regard to relevant qualifications and experience) for Australian applicants. ASIC can also impose conditions on the applicant’s registration (if approved) that apply to the person’s registration in New Zealand. RG 258.16 Sections E, F and G apply to New Zealand insolvency practitioners. Note: Sections B, C and D do not apply to New Zealand insolvency practitioners. Ongoing obligations of registered liquidators RG 258.17 A registered liquidator must: (a) maintain the qualifications, experience, knowledge and abilities required of a registered liquidator; (b) take out and maintain adequate and appropriate PI insurance; (c) take out and maintain adequate and appropriate fidelity insurance; (d) comply with any current condition imposed on their registration; (e) comply with the provisions of the Corporations Act and other relevant laws; (f) carry out adequately and properly the duties of a liquidator and any other duties or functions required under the law; and (g) remain a fit and proper person. Page 9 RG 258: Registered liquidators: Registration, ongoing obligations, disciplinary actions and insurance requirements © Australian Securities and Investments Commission October 2024 Page 9 RG 258.18 If you are a registered liquidator during all or part of a liquidator return year, you must lodge an annual liquidator return for that return year. The annual liquidator return must be in the approved form. RG 258.19 As a registered liquidator, you also have an ongoing obligation to notify ASIC of certain ‘significant events’ (e.g. if you become an insolvent under administration or are convicted of an offence involving fraud or dishonesty) and certain ‘other events’ (e.g. if you cease to practise as a registered liquidator or there is a change to your personal details). RG 258.20 A registered liquidator’s registration is for three years. A registered liquidator may apply to ASIC to renew their registration. ASIC must renew the registration if the liquidator meets the criteria for renewal. Note: These requirements are discussed in Sections E, F and G. Disciplinary and other actions RG 258.21 As a registered liquidator, you may be subject to disciplinary and other actions. Those actions include: (a) an ASIC direction to: (i) remedy a failure to lodge any document required to be lodged with ASIC (s40-5(2)); (ii) complete or correct the information in a document lodged with ASIC (s40-10(2)); or (iii) not accept further appointments (s40-15(1)); (b) automatic cancellation of your registration as a liquidator in certain circumstances (s40-20); (c) cancellation or suspension by ASIC of your registration as a liquidator in certain circumstances (s40-25 and 40-30); (d) ASIC issuing a show-cause notice under s40-40 on a range of grounds; (e) referral to a disciplinary committee under s40-50 and subsequent action by the disciplinary committee under s40-55; (f) notice by an industry body to ASIC under s40-100 of possible grounds to suspend or cancel your registration, to give you a show-cause notice or to impose a condition; and (g) orders made by the court under s45-1. RG 258.22 You may also initiate actions affecting your own registration such as applying to vary or remove a condition imposed on your registration, applying to lift or shorten the period of a suspension, or applying to voluntarily cancel or suspend your registration as a liquidator. Note: These actions are discussed in Section F. Page 10 RG 258: Registered liquidators: Registration, ongoing obligations, disciplinary actions and insurance requirements © Australian Securities and Investments Commission October 2024 Page 10 Insurance requirements RG 258.23 Section 25-1 requires a registered liquidator to maintain adequate and appropriate PI and fidelity insurance against the liabilities that the liquidator may incur working as a registered liquidator. Note: These requirements are discussed in Section G. RG 258.24 You should determine what is adequate and appropriate PI and fidelity insurance after reviewing your business operations, and work out your insurance needs each year taking into account your own particular risk profile. Note: You commit an offence if you fail to maintain adequate and appropriate insurance: s25-1(3) and (4). Page 11 RG 258: Registered liquidators: Registration, ongoing obligations, disciplinary actions and insurance requirements © Australian Securities and Investments Commission October 2024 Page 11 B Applying to be registered to act as an external administrator of companies, receiver and receiver and manager Key points This section applies to applicants who wish to act as: • an external administrator of companies (liquidator, voluntary administrator, administrator of a deed of company arrangement, a restructuring practitioner for a company or a restructuring practitioner of a restructuring plan); and • a receiver and receiver and manager. To become a registered liquidator you must demonstrate to a committee that you meet the requirements for registration: see RG 258.28– RG 258.76. ASIC must register you as a liquidator if a committee has decided you should be registered, and you produce evidence in writing that you have taken out adequate and appropriate PI and fidelity insurance: see RG 258.296. Unlimited or limited registration RG 258.25 An individual can apply for an unlimited or limited registration as a liquidator. An unlimited registration allows the liquidator to practice without limitations on the type of appointment they can take. A liquidator with a limited registration may only: (a) act as a restructuring practitioner for a company or a restructuring practitioner of a restructuring plan (see Section C); or (b) act as a receiver and receiver and manager (see Section D). Note: If a person is registered to practise only as a receiver and receiver and manager or only as a restructuring practitioner, that limitation will be a condition imposed on the individual’s registration. RG 258.26 You should refer to Section A for an overview of: (a) the role of registered liquidators; (b) limited or unlimited liquidator registration; (c) the process to become a registered liquidator; (d) ongoing obligations of a registered liquidator; (e) disciplinary and other actions; and (f) insurance requirements. Page 12 RG 258: Registered liquidators: Registration, ongoing obligations, disciplinary actions and insurance requirements © Australian Securities and Investments Commission October 2024 Page 12 RG 258.27 As a committee is a separate entity from ASIC, we cannot provide substantive guidance that committees must follow as committees make their own decisions. The following commentary is based on committee decisions to provide an indication of the matters that committees may consider. Eligibility requirements RG 258.28 A committee must decide that you should be registered as a liquidator to act as an external administrator, receiver and receiver and manager if the committee is satisfied of the matters in Table 1: s20-20(4) and rule 20-1 of the Insolvency Practice Rules (Corporations) 2016 (the Rules). Note 1: See RG 258.81–RG 258.85 for an explanation of the committee interview process. Note 2: References in this guide to rule 20-1 (for example) are to a section of the Rules (in this example numbered 20-1). Table 1: Summary of eligibility requirements for registration to act as external administrator of companies, receiver and receiver and manager Eligibility requirements What you need to have Explanation in this guide Qualifications, experience, knowledge and abilities The prescribed base-level qualifications: s20-20(4)(a) and rule 20-1(2)(a) and (b) RG 258.31–RG 258.33, Table 2 Qualifications, experience, etc. The prescribed experience: s20-20(4)(a) and rule 20-1(2)(c) RG 258.34–RG 258.38, Table 3 Capacity You have demonstrated the capacity to satisfactorily perform the functions and duties of a registered liquidator and be able to satisfy any conditions of registration: s20-20(4)(a) and rule 20-1(2)(e) and (f) RG 258.39–RG 258.42 Insurance You will take out adequate and appropriate PI and fidelity insurance: s20-20(4)(b) Section G Fit and proper You have not been convicted, within 10 years before making the application, of an offence involving fraud or dishonesty: s20-20(4)(c) RG 258.43–RG 258.49, Table 4 Fit and proper You are not, and have not been within 10 years before making the application, an insolvent under administration: s20-20(4)(d) RG 258.50–RG 258.54, Table 4 Fit and proper You have not had your registration as a liquidator cancelled within 10 years before making the application, other than in response to a written request by you: s20-20(4)(e) RG 258.55, Table 4 Page 13 RG 258: Registered liquidators: Registration, ongoing obligations, disciplinary actions and insurance requirements © Australian Securities and Investments Commission October 2024 Page 13 Eligibility requirements What you need to have Explanation in this guide Fit and proper You have not had your registration as a trustee under the Bankruptcy Act 1966 (Bankruptcy Act) cancelled within 10 years before making the application, other than in response to a written request by you: s20-20(4)(f) RG 258.56, Table 4 Fit and proper You are not disqualified from managing corporations under Pt 2D.6 of the Corporations Act or under another law: s20-20(4)(g) RG 258.57–RG 258.58 Table 4 Fit and proper You are otherwise a fit and proper person: s20-20(4)(h) RG 258.59–RG 258.74 Table 4 Residency You are resident in Australia or another prescribed country: s20-20(4)(i) RG 258.75–RG 258.76 RG 258.29 There are certain matters that, even if not satisfied, will not prohibit the committee from registering you. However, the committee must still be satisfied that you would be suitable to be registered. The matters are: (a) that you possess the prescribed qualifications, experience, knowledge and abilities; (b) that your registration either as a liquidator under the Corporations Act or as a trustee under the Bankruptcy Act has not been cancelled within 10 years before making your application (other than in response to a written request from you); and (c) that you are resident in Australia or in another prescribed country (s20-20(5)). Note: At the date of publication, no countries had been prescribed. RG 258.30 A committee must not decide you should be registered as a liquidator if it is not satisfied that: (a) you will take out adequate and appropriate PI and fidelity insurance against liabilities you may incur working as a registered liquidator; (b) in the 10 years before making the application, you have not been convicted of an offence involving fraud or dishonesty; (c) in the 10 years before making the application, you have not been an insolvent under administration; (d) you are not disqualified from managing corporations under Pt 2D.6 of the Corporations Act, a law of an external territory or a law of a foreign country; and (e) you are otherwise a fit and proper person. Page 14 RG 258: Registered liquidators: Registration, ongoing obligations, disciplinary actions and insurance requirements © Australian Securities and Investments Commission October 2024 Page 14 Qualifications RG 258.31 The prescribed base-level qualifications for an applicant for registration as a registered liquidator to act as an external administrator of companies, receiver and receiver and manager are summarised in Table 2. Note: The committee may determine that an applicant should be registered, even if the committee is not satisfied about this matter: see RG 258.29. Table 2: Summary of qualifications required to act as external administrator of companies, receiver and receiver and manager Eligibility requirements What you need to have What you should include in your application Tertiary qualifications: s20-20(4)(a) and rule 20-1(2)(a) A tertiary qualification that includes at least three years of full-time study (or its equivalent) in commercial law and accounting A copy of your statement of academic record certified by the institution that issued the qualification, which identifies the subjects you completed for that qualification and explains your results AND A copy of your degree, diploma or certificate from the institution that issued the qualification AND If you are relying on an overseas qualification— certification from CPA Australia or Chartered Accountants Australia and New Zealand (CA ANZ) or from Commonwealth Department of Education (overseas qualification assessment) about the comparability between your qualification and an Australian undergraduate degree in commercial law and accounting Specialist insolvency qualifications: s20-20(4)(a) and rule 20-1(2)(b) At least two course units accredited under the Australian Qualifications Framework Level 8 (or equivalent study) in the practice of external administrators of companies, receivers, receivers and managers, and trustees under the Bankruptcy Act A certification letter from the institution confirming that you have passed subjects that include at least two course units accredited under the Australian Qualifications Framework (or equivalent study) in the practice of external administrators of companies, receivers, receivers and managers, and trustees under the Bankruptcy Act Tertiary qualifications RG 258.32 The committee must be satisfied that your tertiary qualification includes subjects (by whatever name) dealing with accounting and commercial law. This may include subjects dealing with: (a) for accounting—Australian accounting and auditing standards, Australian financial and corporate accounting, cost and management accounting and corporate finance; and Page 15 RG 258: Registered liquidators: Registration, ongoing obligations, disciplinary actions and insurance requirements © Australian Securities and Investments Commission October 2024 Page 15 (b) for commercial law—contract law, torts, trust law, Australian business law, Australian corporations law and Australian taxation law (each at least at an introductory level). Specialist insolvency qualifications RG 258.33 The committee must be satisfied that you have completed the academic requirements for at least two course units accredited under the Australian Qualification Framework Level 8 (or equivalent study) in the practice of external administrators of companies, receivers, receivers and managers, and trustees under the Bankruptcy Act. This may include subjects dealing with: (a) the duties, functions, powers and responsibilities of external administrators, receivers and receivers and managers; (b) preserving, recovering and realising assets; (c) conducting investigations and examinations; (d) conducting creditors’ meetings; (e) adjudicating proofs of debt and distributing dividends; (f) reporting to creditors and to ASIC; and (g) professional ethics. Experience RG 258.34 The prescribed experience for an applicant for registration to act as an external administrator of companies, receiver and receiver and manager is summarised in Table 3. Note: The committee may determine that an applicant should be registered, even if the committee is not satisfied about this matter: see RG 258.29. Table 3: Summary of experience required to act as external administrator of companies, receiver and receiver and manager Eligibility requirements What you need to have What you should include in your application To be registered to practise as an external administrator of companies, receiver and receiver and manager: s20-20(4)(a) and rule 20- 1(2)(c) During the five years immediately preceding the day on which the application is made—have engaged in at least 4,000 hours of relevant employment at a senior level A summary of your employment history for the last five years (including names of employers, positions held and dates) AND Full details demonstrating that you have engaged in 4,000 hours of relevant employment (generally insolvency related) at a senior level in the five years immediately preceding the day on which you make this application Note: Use the template Senior level employment history (available to download from the RG 258 landing page) to provide this information Page 16 RG 258: Registered liquidators: Registration, ongoing obligations, disciplinary actions and insurance requirements © Australian Securities and Investments Commission October 2024 Page 16 Relevant employment RG 258.35 A committee may decide that an applicant should be registered—even if the committee is not satisfied that the applicant has the qualifications, experience, knowledge and abilities prescribed—provided the applicant is suitable to be registered as a liquidator: s20-20(5). RG 258.36 For example, this may be applicable where an applicant does not have 4,000 hours of relevant employment at a senior level during the five years preceding the application due to a career break or other leave of absence, yet they have experience beyond the five-year period. If you believe there are valid reasons why you may not meet the ‘relevant employment’ criterion, you may apply for registration and explain your circumstances to the committee. RG 258.37 If you apply for registration to practise as an external administrator of companies, receiver and receiver and manager, ‘relevant employment’ means employment that: (a) involves any of the following: (i) assisting a registered liquidator in the performance of his or her duties as external administrator of companies, receiver or receiver and manager; (ii) providing advice in relation to the external administration of companies, receivership or receivership and management; (iii) providing advice in relation to Subdiv C of Div 3 of Pt 5.7B of the Corporations Act (safe harbour from breach of duties); (iv) providing advice in relation to the restructuring of company debt outside the external administration of companies, receivership or receivership and management; and (b) provides direct or indirect exposure to processes (including bankruptcy) under the Bankruptcy Act; and (c) includes any other employment that the committee considers relevant: rule 20-1(2)(c) and (3). Examples of ‘other employment’ a committee may consider include: (i) advice provided to directors and other advisers prior to a formal appointment; (ii) corporate restructuring and advice that is not a formal external administration; (iii) quality reviews; (iv) template and internal process creation and maintenance; and (v) preparing and delivering technical papers or training. Note: Rules 20-1(3) and (4) were amended (with effect from 1 January 2021) to include the words ‘direct or indirect’ when referring to exposure to processes (including bankruptcy) under the Bankruptcy Act 1966. Page 17 RG 258: Registered liquidators: Registration, ongoing obligations, disciplinary actions and insurance requirements © Australian Securities and Investments Commission October 2024 Page 17 At a senior level RG 258.38 Matters that the committee may consider when deciding whether your employment was at a senior level include: (a) whether you: (i) formed opinions and made recommendations to the appointee about strategic and tactical matters, and the financial and potential legal position of the company; (ii) were directly involved in planning and managing the conduct of the external administration, receivership or receivership and management (including conducting appropriate investigations of the company’s business, property, affairs and financial circumstances) on behalf of the appointee; (iii) prepared draft reports to creditors on behalf of the appointee; (iv) instructed solicitors and evaluated legal advice as directed by the appointee; and (v) supervised staff who reported through you to the appointee, and had responsibility for allocating these resources; (b) whether you reported directly to the external administrator, or to the receiver or receiver and manager (the appointee); and (c) whether your experience was gained when you were a principal in the firm or at a level immediately below that of principal. Note: The committee may determine that an applicant should be registered, even if the committee is not satisfied about this matter: see RG 258.29. Capacity RG 258.39 The committee will consider whether the applicant has the capacity to satisfactorily perform the functions and duties of a registered liquidator. Note 1: The committee may determine that an applicant should be registered, even if the committee is not satisfied about this matter: see RG 258.29. Note 2: Applicants who are employees are required to provide the letter from their employer referred to in Table 4 which relates partly to capacity issues. Applicants are not required to provide additional documentary evidence of capacity as part of their application. The Guide to personal and resource capacities (available to download from the RG 258 landing page) contains guidance about the type of information a committee may request in assessing whether the criteria are met. RG 258.40 In considering this matter, the committee may consider a range of factors relating to resource capacity and personal capacity. Page 18 RG 258: Registered liquidators: Registration, ongoing obligations, disciplinary actions and insurance requirements © Australian Securities and Investments Commission October 2024 Page 18 RG 258.41 When considering resource capacity, the committee may consider: (a) human and technological resources available to you; (b) processes for monitoring and assessing the continuing adequacy of human and technological resources; (c) systems and processes available to you for ongoing supervision and training of staff; (d) systems and processes for conducting corporate external administration and other insolvency appointments; (e) procedures for recording and handling complaints; (f) systems for managing risks including cyber-related risks and implementation of appropriate cyber-security processes; and Note: You can find more information at the Australian Cyber Security Centre website. (g) other considerations including how you would cater for appointments outside of the location where you normally practice and any reliance on staff from another firm or practice. RG 258.42 When considering personal capacity, the committee may consider whether the applicant can demonstrate high-level competencies in the activities commonly undertaken by registered liquidators and may assess the competencies achieved by a combination of acquiring technical knowledge and experience. Competency areas assessed by a committee may relate to competencies in: (a) external administration options; (b) realisation of company assets and property and trade-on; (c) management of funds; (d) investigations; (e) dealings with creditors; (f) interactions with ASIC; (g) the duties and obligations of registered liquidators; and (h) interpersonal skills. Page 19 RG 258: Registered liquidators: Registration, ongoing obligations, disciplinary actions and insurance requirements © Australian Securities and Investments Commission October 2024 Page 19 Fit and proper RG 258.43 You must satisfy the committee that you are a fit and proper person to be registered as a liquidator. These requirements are summarised in Table 4. Table 4: Summary of fit and proper requirements Eligibility requirement Relevant time frame What you should include in your application Not convicted of an offence involving fraud or dishonesty: s20-20(4)(c) Within 10 years before making the application for registration A national criminal history check that covers the relevant time frame, dated not more than three months old AND If you have lived overseas for one year or more during the past 10 years—a criminal history check from the country or countries in which you resided AND If you have been convicted within the past 10 years of an offence involving fraud or dishonesty— details of the conviction Note: This requirement is subject to Pt VIIC of the Crimes Act 1914 (which relates to spent convictions, among other things) Not insolvent under administration: s20- 20(4)(d) Currently or within 10 years before making the application for registration If you are or have been an insolvent under administration within the relevant time frame— details of the insolvency AND A bankruptcy check from the Australian Financial Security Authority (AFSA) including a National Personal Insolvency Index (NPII) extract containing information on proceedings and administrations under the Bankruptcy Act for the relevant time frame Registration as a liquidator has not been cancelled, other than in response to a written request: s20-20(4)(e) Within 10 years before making the application for registration If your registration as a liquidator has been cancelled within the past 10 years other than in response to a written request by you—details of the cancellation Registration as a trustee has not been cancelled, other than in response to a written request: s20- 20(4)(f) Within 10 years before making the application for registration If your registration as a trustee under the Bankruptcy Act has been cancelled within the past 10 years other than in response to a written request by you—a letter from AFSA providing details of the cancellation Not disqualified from managing corporations: s20-20(4)(g) At the time of making the application Note: A committee cannot decide to register an applicant who is disqualified Confirmation in the application that at the date of your application, you are not disqualified from managing corporations under Pt 2D.6 of the Corporations Act, or under a law of an external territory or foreign country Page 20 RG 258: Registered liquidators: Registration, ongoing obligations, disciplinary actions and insurance requirements © Australian Securities and Investments Commission October 2024 Page 20 Eligibility requirement Relevant time frame What you should include in your application Otherwise a fit and proper person: s20-20(4)(h) Various Two referee reports dated no more than three months before the date you lodge your application covering your experience during the five years immediately preceding the date you lodged your application Note: ASIC’s Guide for referees (available to download from the RG 258 landing page) provides guidance on preparing referee reports AND Details about membership of relevant professional/industry bodies over the past 10 years, including a letter from the professional/industry body specifying only:  whether your membership is current  when your membership began  if applicable—when and why your membership ceased Note 1: Professional/industry body includes those bodies prescribed in rule 40-1 Note 2: Please check with the relevant professional/industry body regarding their policy on providing such letters AND If a professional/industry body refused to accept your application for membership in the past 10 years—details of that refusal AND Details of any legal or disciplinary action taken against you by a professional/industry body in the past 10 years. You should include any such action regardless of the outcome and penalties imposed. You should provide the dates of the legal or disciplinary action and the details and outcomes of such action AND If you are an employee—a letter from your employer including information about the arrangements between you and your employer to satisfy the committee that:  these arrangements will enable you to have independence in the manner in which you work, and  you will have access to and control over staff and other resources to adequately and properly perform your duties and discharge your functions as a registered liquidator Page 21 RG 258: Registered liquidators: Registration, ongoing obligations, disciplinary actions and insurance requirements © Australian Securities and Investments Commission October 2024 Page 21 Not convicted of an offence Criminal history RG 258.44 You will need to provide a national criminal history check from the Australian Federal Police (AFP), a state or territory police service, or a broker organisation accredited by the Australian Criminal Intelligence Commission. The national criminal history check should cover the period of 10 years before the date of your application for registration and can’t be more than three months old. RG 258.45 The time it takes to obtain a national criminal history check also differs between these organisations, so it is prudent to apply for one early. You may provide us with a copy of the national criminal history check results and retain the original. Applying for a National Police Check through the AFP RG 258.46 You can obtain the request form from the AFP or download it from the AFP website. The form will ask you to identify the purpose of the National Police Check. Overseas criminal history checks RG 258.47 If you have resided in a foreign country for one year or more in the past 10 years, you will need to provide a criminal history check, not more than three months old, from each of the countries in which you resided in the last five years. If you have never resided in Australia, or you arrived in Australia within six months of lodging your application for registration, you will not need an Australian criminal history check in addition to the overseas criminal history check(s). RG 258.48 You must obtain the criminal history check(s) from a national government authority in the relevant country. If this is not possible, you must provide a criminal history check issued by a state or provincial authority for each state or province in which you resided in the last five years. RG 258.49 If authorities in the relevant country do not provide criminal history checks, you must provide a statutory declaration declaring that you have no criminal history and detailing the attempts you have made to obtain a criminal history check from the relevant authorities. A solicitor, justice of the peace, notary or other qualified person must witness the signed statutory declaration. Note: The Statutory Declarations Regulations 1993 provide a form of statutory declaration suitable for this purpose and specify the persons before whom a statutory declaration may be made. Page 22 RG 258: Registered liquidators: Registration, ongoing obligations, disciplinary actions and insurance requirements © Australian Securities and Investments Commission October 2024 Page 22 Not insolvent under administration RG 258.50 Section 9 of the Corporations Act defines ‘insolvent under administration’ as: (a) a person who under the Bankruptcy Act or the law of an external territory, is a bankrupt in respect of a bankruptcy from which the person has not been discharged; (b) a person who under the law of an external territory or the law of a foreign country, has the status of an undischarged bankrupt; (c) a person any of whose property is subject to control under: (i) s50 or Div 2 of Pt X of the Bankruptcy Act; or (ii) a corresponding provision of the law of an external territory or the law of a foreign country; (d) a person who has not fully complied with the terms of a personal insolvency agreement executed under: (i) Pt X of the Bankruptcy Act; or (ii) the corresponding provisions of the law of an external territory or the law of a foreign country; or (e) a person who is a party (as a debtor) to a debt agreement under: (i) Pt IX of the Bankruptcy Act; or (ii) the corresponding provisions of the law of an external territory or the law of a foreign country. RG 258.51 You should provide a bankruptcy check from AFSA, including an NPII extract containing information about any proceedings and administrations under the Bankruptcy Act involving you. The check and extract should be dated not more than two weeks before the date of your application for registration. RG 258.52 The NPII does not disclose a historic record of all persons who have been a party to a Pt IX debt agreement. The NPII extract will only show records up to five years from the date of the agreement or the date obligations are discharged or up to two years from the date the debt agreement was terminated or declared void by the court. RG 258.53 Despite the fact that the NPII may not disclose records older than five years, you need to disclose those records that are older than five years but less than 10 years. RG 258.54 You should also disclose information where you have been subject to similar proceedings and administrations in non-Australian jurisdictions. Page 23 RG 258: Registered liquidators: Registration, ongoing obligations, disciplinary actions and insurance requirements © Australian Securities and Investments Commission October 2024 Page 23 Previous registration as liquidator cancelled RG 258.55 If your registration as a liquidator has been cancelled within the last 10 years other than in response to a written request by you, you must provide details of that cancellation. Registration as bankruptcy trustee cancelled RG 258.56 If your registration as a trustee has been cancelled within the last 10 years other than in response to a written request by you, you should obtain a letter from AFSA providing details of that cancellation. Not disqualified from managing corporations RG 258.57 To meet this requirement, you must not be disqualified from managing corporations under Pt 2D.6 of the Corporations Act or under a law of an external territory or foreign country: s20-20(4)(g). RG 258.58 Section 206B of the Corporations Act sets out the reasons for disqualification. Under that section, a person is automatically disqualified from managing a corporation if they have been convicted of certain types of offences or if they are personally insolvent under Australian or foreign law. Otherwise a fit and proper person RG 258.59 You must satisfy the committee that you are ‘otherwise a fit and proper person’: s20-20(4)(h). RG 258.60 The expression ‘fit and proper’ gives ‘the widest scope for judgment and indeed for rejection’: see Hughes and Vale Pty Ltd v The State of NSW (No. 2) (1955) 93 CLR 127 at 156–7. It takes into account matters such as a person’s honesty, integrity, knowledge, ability, good character and judgement. RG 258.61 As a registered liquidator you are expected to fulfil your duties and obligations adequately and properly in every external administration. RG 258.62 Where you are appointed to an external administration with limited to no funds, you are still required to adequately and properly perform your duties and functions as required by the Corporations Act, common law, and professional codes and standards. You must not resign from such an appointment purely due to a lack of funds or remuneration. Referee reports RG 258.63 To assist the committee to consider your application you must provide two referee reports. These should be dated no earlier than three months before the date you lodge your application. Page 24 RG 258: Registered liquidators: Registration, ongoing obligations, disciplinary actions and insurance requirements © Australian Securities and Investments Commission October 2024 Page 24 RG 258.64 Referees must be able to express opinions about you based on their personal knowledge of you and direct observation of your conduct. RG 258.65 Where possible, at least one referee should be a person who directly supervised your work on external administrations and/or receiverships and receivership and management appointments. This referee should be either a registered liquidator or an appropriately licensed corporate insolvency practitioner in a country where the corporate insolvency laws and practices are comparable to those in Australia. RG 258.66 The other referee should be a person who can attest to: (a) your knowledge of the powers, functions and duties of a registered liquidator; (b) your skill, experience at a senior level, diligence and judgement in corporate insolvency work; and (c) your honesty and integrity. RG 258.67 Where possible, the second referee should be a person external to your current firm who supervised your work on external administrations and/or receiverships and receivership and management appointments or a solicitor who can comment on your involvement in issues related to external administrations and/or receiverships and receivership and management appointments. RG 258.68 ASIC’s Guide for referees (available to download from the RG 258 landing page) provides guidance for referees on how to prepare referee reports. You should give your referees a copy of your application and the supporting material about your corporate insolvency experience so that the referees can attest to and comment on that experience. RG 258.69 The Guide for referees includes specific competency-based questions. We expect referees who have directly supervised your work to provide detailed responses to these questions. We expect other referees to respond to the competency-based questions to the extent they can. Refused membership of professional/industry body RG 258.70 To assist the committee to consider whether you are a fit and proper person, you must provide details of any instances where a professional/industry body has refused to accept your application for membership in the past 10 years. Note: Professional/industry body includes those bodies prescribed in rule 40-1. RG 258.71 You should provide the dates of your application and the dates and reasons provided by the relevant professional/industry body for refusing your membership. Page 25 RG 258: Registered liquidators: Registration, ongoing obligations, disciplinary actions and insurance requirements © Australian Securities and Investments Commission October 2024 Page 25 Legal or disciplinary action by professional/industry body RG 258.72 To assist the committee to consider whether you are a fit and proper person, you must provide details of any legal or disciplinary action taken against you by a professional/industry body in the past 10 years. RG 258.73 You should include any such action, regardless of the outcome and penalties imposed. RG 258.74 You should provide the dates of the legal or disciplinary action and the details and outcomes of the action. Resident in Australia or another prescribed country RG 258.75 The committee will consider whether you are resident in Australia or in another prescribed country: s20-20(4)(i). Note 1: The committee may determine that an applicant should be registered, even if the committee is not satisfied about this matter: see RG 258.29. Note 2: At the date this guide was published, no countries have been prescribed. RG 258.76 You must provide, with your application, details of your current and past residential addresses over the past five years, indicating the approximate dates you lived at those addresses. Lodging your application for registration RG 258.77 Table 5 sets out the steps you need to follow to lodge your application for registration as a registered liquidator. For further information, see Applying for and managing your liquidator registration on the ASIC website. Table 5: Lodging your application for registration Step 1 You must apply using Form 903B Application for registration as a liquidator. Note 1: There is a fee for lodging an application to be registered as a liquidator (see INFO 30 for the current fee). Note 2: To access this form offline, call ASIC on 1300 300 630. Step 2 Your application must:  be in the approved form (i.e. Form 903B); and  include the information and documents referred to in the approved form. Note 1: The Liquidator registration checklist (available to download from the RG 258 landing page) referred to in Form 903B outlines the information and documents you should include in your application. Note 2: The information in your application should be up to date at the time you lodge your application. We may contact you if we consider that your application contains out-of-date information. For most purposes, we consider information more than three months old to be out of date. Page 26 RG 258: Registered liquidators: Registration, ongoing obligations, disciplinary actions and insurance requirements © Australian Securities and Investments Commission October 2024 Page 26 Step 3 You must send a scanned copy of the signed application Form 903B and all supporting documents by email to: LiquidatorRegistrationProofs@asic.gov.au. Note: The size limit of each email we can accept is 10 MB. If necessary, to meet size limits, please send multiple emails containing supporting documents. Make sure that you include the applicant name in the subject line of each email. Step 4 We will send you the invoice for the application fee by email. You should pay the application fee immediately on receipt of the invoice for the lodgement of Form 903B. Note: We expect that the application fee will be paid before your application is referred for consideration by a committee convened under s20-10. Section 1355 of the Corporations Act provides that where a fee is payable for a matter involving an act to be undertaken by ASIC, ASIC may refuse to do that act until the fee is paid. Processing your application RG 258.78 An application is properly made when the application is lodged with ASIC in the approved form: s20-5. This means the application must: (a) be made in the form approved by ASIC (i.e. Form 903B); (b) include the information, statements, explanations and other matters required by that form; and (c) be accompanied by any other material required by that form (s1