IPA comments on ASIC's insolvent trading guide

24/01/2010

We enclose the submission made to ASIC on its Consultation Paper 124 - Duty to prevent
insolvent trading: Guide for Directors.

The IPA supports the issue of the guide but considers that:

• the guide should give more emphasis to its purpose as a positive education tool for directors and give less emphasis on how to avoid liability;
• the regulatory guide may wrongly suggest that it is mainly ASIC who will bring such actions - more insolvent trading actions are taken by liquidators than by ASIC;
• the guide would be better placed as an Insolvency Information sheet rather than a Regulatory Guide.

If these comments raise any issues for discussion, please contact the IPA Technical Director, Ms Kim Arnold (02 4283 2402 – [email protected]) or myself (02 9080 5826 – [email protected]). 

Michael Murray IPA Legal Director