ASIC on 20th October announced that Michael Dwyer, was retiring as Commissioner after three busy years. Mr Dwyer’s experience in the insolvency industry has coincided with the GFC, and with the Senate Inquiry into Liquidators, Administrators. Like the ASIC Chair, we pay tribute to Mr Dwyer’s efforts (particularly as a former Adelaide practitioner) and look forward to his continuing contribution in the insolvency field.
Two new Commissioners have since been appointed by the Treasurer, clearly eminently experienced, though with focus on securities regulation/international, and competition/consumer protection backgrounds. This leaves ASIC bereft of a Commissioner with insolvency focus or experience.
Last weekend(12th November) , we noticed the advert for another Commissioner, tucked away at the bottom of the Inquirer section of the Weekend Australian. If you were thinking of a new job or even browsing, you would probably go to the Professional supplement of the newspaper, or if you were in the business/regulatory area, you might read the Business supplement. Indeed, the main section of the newspaper also carries several large job advertisements, including for the CEO of Drinkwise Australia, and a new V-C for Macquarie University. So if you had time on your hands, you might read the Inquirer section, and you might spot the advert for a new ASIC Commissioner inside it, at the bottom of the page, next to the advert for the Tiwi Islands Assistant Director of Infrastructure. Hopefully, all this means that the Government has someone in mind for the position, and hopefully they are an insolvency expert. At least this position has been advertised, unlike the Chairman’s position earlier in the year, which itself has been the subject of recent press comment, see November 12th Sydney Morning Herald), Should any readers wish to apply to be the newest ASIC Commissioner, the closing date is 25th November 2011, total package around $500 000 (no doubt requiring some of our readers to take a pay cut!).
However, even though it has been advertised, the Treasurer did earlier indicate that he would be looking to replace Mr Dwyer, so it is somewhat regretful to observe that the job advert does not specifically refer to insolvency as an essential or desirable area of knowledge, but instead to ‘financial system and regulation’. Whilst it is appreciated that being an ASIC Commissioner requires one to have understanding and working knowledge of the whole range of ASIC’s ever-expanding activities, there are particular reasons why insolvency needs to be a focus for ASIC right now.
First, its the economy of course. Despite the Chinese firewall, the latest statistics from ASIC itself, show a sharp rise in insolvency activity other than in mining, compared to the same time last year. That is already recent history, but the Euro crisis may mean worse is to follow.
Secondly, there was the Senate Inquiry in 2010 into Liquidators and Administrators, which raised concerns about ASIC’s role in insolvency, lack of statistics, responsiveness, and its resourcing of the area, and which questioned whether the role should not be handed over to a new insolvency regulatory authority responsible for personal and corporate insolvency.
Whilst stating during the Inquiry that it was adequately resourced and/or could call on more government resources if needed, ASIC’s outgoing chairman, Michael D’Aloisio, in his retiring comments earlier this year, eventually acknowledged the need for more resources and focus by ASIC on insolvency regulation. The Treasury’s Options Paper (June 2011) firmly suggested, we think mistakenly, that there is no need to shift corporate insolvency practitioner regulation from ASIC (Treasury-there is still time to change your mind!). However, now ASIC, and certain insolvency practitioners, are under attack from the Age newspaper, which has pulled no punches, in relation to ASIC waivers in certain restructurings. As is often the case, it is difficult for ASIC to respond, since much of its work is confidential and has to follow due process in relation to complaints. Nevertheless, in relation to insolvency, it could be said to have been a double ‘annus horribilis’ for ASIC in the last two years. Some changes, albeit not as radical (and indeed offbeam) as some of those put forward by the Senate Inquiry Report, will no doubt emerge from the Treasury’s June Options Paper and will require to be implemented by ASIC. Now more than ever, if it is to retain insolvency regulation, it needs a firm, experienced insolvency expert, but with the ability to act independently from the insolvency profession.
So despite the breadth of the job advert, we hope, for ASIC’s sake and that of the insolvency community, and wider public interest, that the next Commissioner to be appointed has some specialist knowledge of insolvency. If not, then the sentiment of the Senate Inquiry that ASIC does not give sufficient priority to its insolvency work will start to ring true.