Jirsch Sutherland responds to ASIC funding model proposals

Jirsch Sutherland was keen to provide a response to ASIC when it called for submissions for its proposed Industry Funding model. Sule Arnautovic, Managing Partner, says the company’s view is very clear and aligns closely with ARITA’s*.

“We believe ASIC’s ‘user pays’ proposals will have a detrimental effect on the industry,” he says. “Not only does the model refer to liquidators as ‘users’, which we feel is incorrect, but the proposals also contain little economic modelling.”

Sule says not only will implementing the proposals lead to an increase in unfair costs for liquidators, but also many liquidators will leave the industry as a result.

“The ongoing effects of the proposals – if implemented – will include fewer liquidators within our staff and fewer opportunities for the next generation of liquidators,” he says. “There would also be a move away from undertaking formal appointment work.”

Sule says ASIC should focus on the root cause of misconduct around insolvency, namely director misconduct and the facilitation of that misconduct by pre-insolvency advisers, rather than on liquidators.

“Relieving ASIC of its oversight of liquidators by creating a single regulator for practitioners would allow ASIC to have this proper focus,” he says.

The call for submissions is now closed and ASIC says it will introduce the new industry funding model in the second half of 2017.

* Click here for more information on ARITA’s response to ASIC’s proposed model: www.arita.com.au/news-item/2016/11/08/treasury-releases-asic-user-pays-model