Updates to ASIC insolvency regulatory guides

ASIC is in the process of updating 4 of its regulatory guides on insolvency, in the next few months, and consulting on 2 new ones.  These are listed, with some comments made.  AFSA also has its set of guidance notes.

Proposed changes to Regulatory Guide 258 Registered liquidators: Registration, disciplinary actions and insurance requirements (RG 258), particularly regarding initial registration and ongoing obligations. This Guide is dated March 2017 and requires updating due to law changes since then, in particular, that the interview committee has a discretion to grant registration to an applicant even though, for example, the 4,000 hours of experience have not been met. The PJC Report on Corporate Insolvency of July 2023 recommended that the government change the experience eligibility requirements for liquidators, to address what it said was “the inequity of the requirements and the gender imbalance in the population of registered liquidators” but that is a matter for a change in the law.    

Proposed changes to Regulatory Guide 217 Duty to prevent insolvent trading: Guide for directors (RG 217), which need to respond to various recommendations in the 2022 Safe Harbour Review.  The PJC Report also recommended [7] that the government implement other recommendations from the Safe Harbour Review.

Proposed changes to Regulatory Guide 16 External administrators – Reporting and lodging (RG 16). This is dated July 2008 although it refers to COVID-19 related changes in 2020.  Reporting obligations of external administrators came under scrutiny in the PJC Report but the recommendation made [19] is a matter of law reform for government.   

Proposed changes to Regulatory Guide 242 ASIC’s power to wind up abandoned companies (RG 242) to include winding up on public interest grounds. This Guide was re-issued in March 2022 and is based on legislation and regulations as at that date.  The Guide says that ASIC it may exercise its power to wind up an abandoned company on request by an employee where the winding up would help the employee access FEG assistance. Under s 489EA(1) ASIC may order a company be wound up if “ASIC has reason to believe that making the order is in the public interest”. After ASIC orders the winding up of a company, one of 32 liquidators from ASIC’s Abandoned Company Liquidator Panel is to wind up the company’s affairs and help employees to access any unpaid employee entitlements under the Fair Entitlements Guarantee Act 2012.

In 2021-2022, ASIC appointed liquidators to seven abandoned companies.

Consultation on a new regulatory guide about ASIC’s power to appoint reviewing liquidators under section 90-23 of Schedule 2

When ASIC appoints a reviewing liquidator under section 90-23, “ASIC expects [them] to inquire, investigate and report on suspected illegal phoenix activity. This includes the conduct of the appointed external administrator where they appear to facilitate or have facilitated the activity through a lack of independence, or by not conducting adequate investigations and reporting both to creditors and ASIC”.

ASIC has a Reviewing Liquidator Panel of 15 liquidators. In 2021-2022, ASIC appointed one reviewing liquidator.

Consultation on a new regulatory guide about requesting eligible applicant authorisation

A person may be authorised by ASIC to make applications for public examinations under s 596A and 596B, the breadth of which was confirmed by the High Court in Walton v ACN 004 410 833 Limited (formerly Arrium Limited) (in liq) [2022] HCA 3.  A new regulatory guide may need to explain the extent and limits of the authorisation. 

Regulatory guides

Regulatory guides, as ASIC explains, give guidance by explaining when and how ASIC will exercise specific powers under legislation and how ASIC interprets the law in question, and by describing the principles underlying ASIC’s approach and giving practical guidance, for example steps involved in applications or examples of how legal obligations should be met. They are based upon legislation as at the date of issue, hence their guidance may not be current and they need to be constantly updated.   

ASIC also warns that they do not constitute legal advice and it encourages “you to seek your own professional advice to find out how the Corporations Act and other applicable laws apply to you, as it is your responsibility to determine your obligations”.

Nor do they constitute the law.  As the Court said in Bevillesta,[1] an ASIC regulatory guide is a policy document to which the Court will have regard in a particular case, if relevant, but it “obviously does not have any binding effect on the Court”.

In that case the then version of RG 82 External administration: Deeds of company arrangement involving a creditors’ trust warned that the use of creditors’ trusts created special risks for creditors and could amount to abuse of the Part 5.3A process or be otherwise contrary to the public interest.

The Court there was in fact critical of those warnings when in that case such a trust was in the best interests of the creditors.[2] Given that the then Guide put administrators on notice that “failure to comply with the Guide may put their professional futures at risk”, the Court said that “it would be prudent to provide for more flexibility so that the administrators can exercise their commercial judgment without the need to seek directions from the Court”.[3] RG 82 has since been re-issued, on 17 December 2018


AFSA’s practice statements are the more comprehensive given the more extensive powers and range of guidance issues covered. 

  • An Inspector General Practice Direction / IGPD states what trustees and debt agreement administrators need to do and how they need to do it.
  • An Inspector General Practice Statement / IGPS explains how AFSA (the Inspector-General) performs its regulatory work.
  • An Official Receiver Practice Statement / ORPS explains how AFSA (the Official Receiver) does its registry work, and states the requirements for the issue of statutory notices to assist trustees.
  • An Official Trustee Practice Statement / OTPS explains how AFSA (the Official Trustee) administers bankrupt estates.

Like ASIC guidance, statements of how AFSA expects personal insolvency practitioners to exercise their powers and comply with their duties is likewise useful but each guidance note is still “purely a guide with no legislative force or effect”.[4]

When in doubt, look at the law.


[1] In the matter of Bevillesta Pty Limited (in voluntary administration) [2011] NSWSC 417.

[2] In the matter of Antqip Hire Pty Limited (subject to deed of company arrangement) (in liquidation) [2020] NSWSC 487.

[3] See also In the matter of TEN Network Holdings Limited (Admins Apptd) (Recs and Mgrs Apptd) and Others [2017] NSWSC 1247

[4] Tsakirakis v Official Receiver & Anor [2013] FCCA 106


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