This little bill
A new bill drawn from the member’s ballot box last month could see a shift in directors' duties.
The IoD has submitted on the Financial Market Authority’s consultation paper ‘Proposed financial reporting exemptions for FMC reporting entities in liquidation, receivership or voluntary administration.’
The FMA is considering introducing the following relief for insolvent Financial Market Conduct (FMC) reporting entities from certain financial reporting obligations under the Financial Markets Conduct Act 2013 (Act).
1. Exemption relief (where a liquidator is appointed)
There would be relief from certain financial reporting duties by way of a class exemption for all insolvent FMC reporting entities (except managed investment schemes) to which a liquidator is appointed, subject to certain conditions.
2. Deferral relief (where a voluntary administrator or receiver is appointed)
There would be relief from certain financial reporting duties for all FMC reporting entities (except managed investment schemes) to which a voluntary administrator or receiver is appointed for a period of 12 months from the appointment of the external administrator, subject to certain conditions.
3. Case-by-case relief
Relief could be provided on a case-by-case basis from financial reporting duties in situations not covered by 1 and 2 above where similar policy considerations apply and the exemption criteria under the Act are met. The FMA would have discretion and could impose conditions.
We generally agree with the problems identified in the consultation paper and we support the proposed relief including appropriate safeguards. In relation to the proposed deferral relief, we consider that 12 months is a reasonable time period.
We also encourage the FMA to engage with other government bodies to consider related matters such as annual meeting requirements and disclosure under the Financial Sector (Climate-related Disclosures and Other Matters) Amendment Bill.