ASIC relief for unlisted entities feeling the pain from COVID-1915 April 2020
On Thursday 9 April 2020 the Australian Securities and Investment Commission (ASIC) announced that it will extend the deadline for unlisted entities to lodge financial reports under Chapters 2M and 7 of the Corporations Act 2001 (Act) by one month for balance dates from 31 December 2019 to 31 March 2020.
Time extensions will not apply to entities with balance dates within the above time period where the cut off to lodge financial reports occurred prior to Thursday 9 April 2020.
The relief is aimed at entities that are unable to meet financial reporting obligations because of the COVID-19 pandemic.
Under sections 319 and 320 of the Act entities must lodge:
- end of year financial reports with ASIC within 3-4 months after the financial year close, and
- half-year financial reports with ASIC within 75 days after the end of the half year.
Failure to meet these obligations is a strict liability offence under s 6.1 of the Criminal Code.
Under chapter 7 of the Act, an Australian Financial Service (AFS) licensee must lodge a profit and loss statements with ASIC:
- within three months from the end of financial year for unlisted Australian Financial Services licensees that are bodies corporate and are also disclosing entities or registered schemes
- within five months from the end of financial year for unlisted AFS licensees that are body corporates and are not disclosing entities or registered schemes, and
- within two months from the end of financial year for AFS licensees that are not bodies corporate
ASIC has reported they will continue to monitor the ability of listed entities to meet the above financial reporting obligations. Although it has not provided blanket relief for listed entities, ASIC has indicated that it will consider applications for relaxation of these obligations on a case by case basis.
Applications requesting relied must be submitted to ASIC at least 14 days before the normal reporting deadline. Further, applications should specifically reference the hardship arising in meeting the reporting deadlines as a direct result of COVID-19.
ANNUAL GENERAL MEETINGS
ASIC has also announced a ‘no action’ position for entities needing to meet obligations to hold an annual general meeting. Read more about this here.