Archived News for Finance Sector Professionals - May, 2012
Figures released by the Australian Bureau of Statistics has released findings that show the managed funds industry had $1,869 billion, recording an increase of $84.9 billion, or 5 per cent, on the December 2011 quarter.
The figures were driven by the increase of $67.2 billion in consolidated assets of managed funds institutions.
The asset types to increase during the quarter were shares, $28.5b (7%); overseas assets, $15.9b (7%); deposits, $10.8b (6%); units in trusts, $5.4b (3%); bonds, etc., $4.1b (6%); short term securities, $2.4b (3%); land, buildings and equipment, $1.5b (1%); and loans and placements, $0.5b (1%). These were partially offset by decreases in other non-financial assets, $1.2b (6%); and derivatives, $0.4b (20%).
Capital expenditure has increased across the economy, with the mining sector driving the majority of 6.1 per cent growth according to the Australian Bureau of Statistics. The trend volume for estimated building and structures rose an estimated 10.5 per cent seasonally adjusted, while the trend volume for investment for equipment, plant and machinery fell by 0.1 per cent,
Engineering services company Hastie Group has announced the appointment of Voluntary Administrators after it was revealed last week that the company had found accounting irregularities to the value of an estimated $20 million. The impending collapse of the company casts doubt over the 2,000 people employed in Victoria and New South Wales.
The Superannuation Legislation Amendment (Trustee Obligations and Prudential Standards) Bill 2012 has passed through the House of Representatives, introducing measures recommended by the Cooper review into the governance, efficiency, structure and operation of Australia's superannuation system.
ASIC has issued its first annual report into its supervision of registered liquidators using it to highlight its areas of focus.
ASIC Deputy Chairman Belinda Gibson said, if a company experiences financial difficulty and goes into external administration, creditors are entitled to expect the business is wound up in an orderly and fair way so they can secure the maximum return of their money possible.
‘The role of registered liquidators in this process cannot be overstated,’ Ms Gibson said. ‘Liquidators are entrusted with creditors’ funds and have considerable discretionary power over assets earmarked for creditors.’
ASIC has undertaken significant work in recent years to sharpen its focus on the insolvency industry in order to promote confidence in the market. This includes ensuring creditors have confidence in the administration of insolvent companies and in ASIC’s supervision of the insolvency practitioner industry. ‘Creditors need to believe that they will get the maximum return possible,’ Ms Gibson said. ‘Clearly, there will be costs in winding up a business but the charges need to be reasonable and reported in a way which allows creditors to make an informed decision to approve or not approve.’
Ms Gibson said the community expects liquidators to execute their professional duties with honesty and integrity, and in accordance with the law. ‘Registered liquidators must be competent and efficient. They cannot use the opportunity to put their interests ahead of their creditors’ interests. They must bring an independent mind to their task,’ Ms Gibson said.
ASIC will continue to draw on its insolvency practitioner dedicated staff, supported by expert resources in other parts of ASIC, with the aim of better regulating practitioners and providing greater communication and monitoring power to creditors.
‘Moving forward, ASIC will focus on lifting our surveillance intensity as we have the extra resources to do so; enforcement outcomes where surveillance identifies unacceptable conduct; providing guidance to the industry about our expectations; and directing creditors toward more “self-help” assistance to ensure they understand and exercise their rights and powers to oversee the liquidation process to best protect their own interests,’ Ms Gibson said.
‘These principles underpin ASIC’s supervision of the sector.’
Ms Gibson’s comments follow ASIC releasing its first annual report into its supervision of the registered liquidators insolvency industry, detailing surveillance and enforcement outcomes in 2011. Issues of competence, independence and inappropriate self gain underpinned ASIC’s supervisory activity.
For the calendar year 2011, ASIC opened eight new formal investigations into registered liquidators, resulting in ASIC cancelling the registration as an official liquidator of John Lord (refer: 11-184MR) and reaching agreement with Peter Ngan that he would not practice as a registered liquidator for two-and-a-half years (refer: 12-04MR). Further, ASIC obtained an undertaking from Atle Crowe-Maxwell (refer: 11-184MR) to ensure compliance with independence requirements when consenting to act as official liquidator.
In June 2011, the Companies Auditors and Liquidators Disciplinary Board (CALDB) cancelled the registration of David Mark Anderson for failing to lodge annual returns with ASIC.
Also, the case against Stuart Ariff concluded in 2011, with the former liquidator jailed for six years following his conviction on 19 criminal charges brought by ASIC (refer: 11-308MR).
Ms Gibson said: ‘Deterrence is one regulatory tool available to ASIC in pursuing our priorities and holding gatekeepers to account.'
At the end of 2011, ASIC was conducting 10 investigations into registered liquidators.
Report 287 ASIC regulation of registered liquidators: January to December 2011 ( REP 287) also shows ASIC completed more than 200 reviews examining issues including practitioner independence, competence and remuneration.
ASIC has a program of compliance visits for registered liquidators based on risk assessment and market intelligence. This includes complaints and information from the public and the profession itself.
ASIC also conducted project work, including checking compliance with independence declarations, remuneration disclosure and insurance requirements.
‘We have built resources in our insolvency practitioners group allowing us to increase surveillance of practitioners,’ Ms Gibson said.
‘Where practitioners do not meet their obligations, we will not hesitate to take action.’
In 2011, ASIC received 426 reports of alleged misconduct concerning registered liquidators, in some instances about the same external administration. Many of these reports (51%) required educative outcomes for the complainants due to, for example, creditors not fully appreciating a liquidator's duties and obligations or the insolvency process.
Key statistics from REP 287:
Global commercial information specialist D&B has published recent findings of its Global Risk Indicator (GRI), finding that Australia is considered one of the safest countries in which to invest.
Australian non-major lenders have significantly increased their share of the first home buyer and refinancing markets according to a recent report conducted by mortgage broker AFG.
The NSW Government has signed a Memorandum of Understanding with the Dubai International Finance Centre Authority Dubai to work closer together to grow their banking and financial services sectors.
Since acquiring management of the AMP Capital Community Infrastructure Fund in September 2010, AMP Capital has acquired four additional social infrastructure assets bringing the total number of assets in the portfolio to eight.
The report of the Parliamentary inquiry into the collapse of Trio Capital, the largest superannuation fraud in Australian history, has found that key checks and balances in the Australian financial and superannuation system failed to identify the fraud.