Creators of ASIC’s ROCAP documents describe their process

 Creators of ASIC’s ROCAP documents describe their process  ASIC, Corporate Insolvency, External administration, Forms, Insolvency Law, Insolvency practices, Regulation  Comments Off on Creators of ASIC’s ROCAP documents describe their process
Jun 212019
 

Creators of ASIC’s ROCAP documents describe their process

Soon after the Australian Securities and Investments Commission (ASIC) issued a form titled “Report On Company Activities and Property“ (ROCAP), the creators of the form – the Communications Research Institute (CRI) – published an article describing the process they went through, their standards and the results of tests carried out.

Form Design process

CRI form design procedure (Source: CRI)

The ROCAP – which replaced the Report as to Affairs (RATA) – is used in corporate insolvencies, where company directors are required to supply liquidators and other external administrators with details of a failed company’s present position, assets, liabilities and history.

Below is a copy of the article written in October 2018 by the head of CRI, Professor David Sless.

As the reader will see, CRI reports that “in the final round of testing (of the new form/documents) participants described the documents as ‘straightforward’ (and that) they easily followed both instructions and the related form-filling task.”

If that’s how the form and accompanying documents are received and processed in practice, it will be a welcome change. Because, by contrast, CRI says it found that “not a single director who participated in the CRI testing of the original RATA could use it appropriately”.

By now (June 2019) feedback to ASIC should indicate whether the new design developed by CRI has been a success, i.e., is regarded by directors and liquidators as more user-friendly and useful. CRI says that “once introduced, the forms and instructions will be carefully monitored and further refined or changed as needed.”

A NEW FORM HELPING FAILED COMPANIES
A Communications Research Institute (CRI) Model project

WHEN A COMPANY fails and an External Administrator is appointed, the Administrator sends a director of the company a form to complete by a set date. The form, known until now as the Report As To Affairs (RATA) had remained largely unchanged since the 19th century.  The Australian Securities and Investment Commission (ASIC), which issues the RATA under the Corporations Act 2001, contracted CRI to develop a new design that would be:

  • user friendly,
  • consistent and logical,
  • visually appealing,
  • easy to read an complete.

CRI drew on its extensive research and practice in forms design spanning over three decades.  CRI collaborated and consulted throughout the project with ASIC and a diverse group of professionals, academics, industry bodies, and former company directors, all of whom contributed to the design of the new form. 

External administrators, in particular, who were the main RATA users told us that it failed to provide them with adequate information on the companies they administered.  CRI, in consultation with ASIC determined that the needs of administrators had to be taken into account in the redesign.

Receiving the RATA is an unhappy and often traumatic experience for company directors.  It marks the end of the company’s life, handing over its remains and final fate to an External Administrator who disposes of it and its assets in the best interests of its creditors.  The feedback showed that in that handing over, filling out the RATA was itself traumatic.

Tellingly, not a single director who participated in the CRI testing of the original RATA could use it appropriately.

The redesign involved all aspects of the form’s structure, language, layout, colour and content, and a change of name from RATA to are more easily understood name: ROCAP – Report on Company Activities and Property.  CRI undertook three rounds of designing, testing, and consultation with ASIC and stakeholders, followed by redesign.

The result is a totally new set of three documents to replace the RATA: Part A contains most of the RATA questions but in a totally new format, Part B contains new questions about the company records, history and management, and the third document contains detailed instructions for completing Parts A and B….

The instructions … are designed to exactly complement the questions, using the same numbering system throughout.

Observations from previous research shows that form users avoid reading instructions on a form because they see the task is primarily a form-filling task rather than are reading-and-form-filling task.  In CRI’s designs, the instructions are always in a separate document, physically removed from the form filling tasks.

Careful design refinement of the navigation between the two documents as a result of testing enabled easy navigation between the two.  In the final round of testing, participants describe the document as “straightforward”. They easily followed both instructions and the related form-filling task.  The new design meets all CRI standards for good information design.

Once introduced, the forms and instructions will be carefully monitored and further refined or changed as needed.

Professor David Sless

Communication Research institute – October 2018

My previous posts on this subject are titled “Framework of new Report as to Affairs (RATA) drafted by ASIC” and “ASIC notifies liquidators that ROCAP is to replace RATA”. 

I plan to post more articles about the new form and documents.

Framework of new Report as to Affairs (RATA) drafted by ASIC

 ASIC, Checklists and guides, Corporate Insolvency, External administration, Forms, Insolvency Law, Insolvency practices, Regulation  Comments Off on Framework of new Report as to Affairs (RATA) drafted by ASIC
Oct 122018
 

On 1 October 2018 the Australian Securities and Investments Commission (ASIC) released a draft of a new Report as to Affairs (commonly known as a RATA). A copy of this form, which includes detailed instructions, may be downloaded from my website or from this ASIC journal.

The new name of the report is to be Report On Company Activities and Property (ROCAP). ASIC intends releasing it in November 2018.

Analysis

Form apges

The following comments outline my preliminary analysis of the draft. Continue reading »

ASIC compares penalties for corporate crime

 ASIC, Corporate Insolvency, Offences, Regulation, White collar crime  Comments Off on ASIC compares penalties for corporate crime
Mar 212014
 
The Australian Securities and Investments Commission (ASIC) has completed a review of penalties in Australia for corporate wrongdoing to assess whether they are proportionate and consistent.  The review compared ASIC’s penalties with those in other countries; those of other Australian regulators; and across ASIC’s regime.white-collar-cartoon-01

 

Results of this review were released yesterday (20 March 2014) in Report 387 – “Penalties for corporate wrongdoing”.

Key findings

ASIC says the key findings show that:

  • on the international comparison —
    • while our maximum criminal penalties—jail and fines—are broadly consistent with those available in other countries, there are significantly higher prison terms in the US, and higher fines in some overseas countries for certain offences;
    • there is a broader range of civil and administrative penalties in other countries, they are higher, and they include the ability to remove financial benefit from wrongdoing (i.e. disgorgement);
  • on the comparison with other Australian regulators—
    • the maximum civil penalties available to ASIC are lower than those available to other regulators and are fixed amounts, not multiples of the financial benefits obtained from wrongdoing; and
  • on the comparison across ASIC’s regime—
    • there are differences between the types and size of penalties for similar wrongdoing. For example, providing credit without a licence can attract a civil penalty up to ten times greater than the criminal fine for those who provide financial services without a licence.

ASIC media release

In releasing the report ASIC Chairman Greg Medcraft said:

“Effective enforcement is critical for ASIC in pursuing our strategic priorities of promoting fair and efficient financial markets and ensuring confident and informed investors and financial consumers. It depends on outcomes that genuinely deter corporate wrongdoing. The public expects ASIC to take strong action against serious corporate wrongdoers. Those who break the law and cause severe damage should face tough penalties. This will make them and others think twice about breaking the law. Tough penalties have a powerful deterrent effect.”

jailfree

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NOTE by author: Report 387 does not appear to review penalties for summary insolvency offences.  To read my paper on this subject, “Convictions for summary insolvency offences committed by company directors”, regarding the Australian scene, CLICK HERE. 

ASIC calls for greater penalties and stands up for its staff

 ASIC, Australian Senate 2013-14, Corporate Insolvency, Official Inquiries, Regulation, White collar crime  Comments Off on ASIC calls for greater penalties and stands up for its staff
Feb 192014
 
In today’s opening statement to the Senate inquiry into the performance of the Australian Securities and Investments Commission (ASIC), the Chairman of ASIC, Mr Greg Metcalf, has called for greater penalties for breaches of corporate law and has strongly defended ASIC staff.

Greg Metcalf

Greg Metcalf, ASIC Chairman

On Penalties

“On the topic of penalties, I would like to say a little more.

There is an expectation among the public that we will take strong action against wrongdoers – and doing this will send a message that shapes future behaviour. However, one of the barriers we face to achieving this is the inadequacy of penalties.

We have outlined some of these inadequacies in our main submission. They include the fact that:

  • some comparable criminal offences currently attract inconsistent penalties
  • civil penalties:
    • are currently set too low
    • are not available for a sufficiently wide range of misconduct
  • lastly, we require a more graduated set of penalties to provide an effective enforcement response in a wider range of cases.

We consider that this includes the greater availability of infringement notice powers.

It is frustrating – both for us and the public – when the penalty available to respond to misconduct is much less than the profit someone made in the process.  If this is so, then rational players in the market will routinely take that risk.  If the thinking of law-breakers is a tussle between fear versus greed, then we need penalties that amplify the fear and smother the greed.

We need penalties that create a fear that overcomes any desire to take risks and break the law.”;

On ASIC staff

“Chairman, one disappointing thing about some of the submissions was the inflammatory tone of criticisms made – particularly about ASIC staff.

ASIC has exceptional employees. They are men and women who work at ASIC for good reason. This is because they believe in the public interest. They are skilled and committed to their work. Considering the difficult job they do, they should receive appropriate respect.

Our people have diverse backgrounds – they have experience in law, accounting and financial services. Many have invaluable industry or consumer advocacy experience. This means they understand how markets work and the issues facing investors, consumers and the wider industry.

ASIC employees also undertake ongoing internal training and have access to industry secondment programs, which further develop their skills.

All of these things make our people highly sought after by the private sector and internationally by other regulators.”

ASIC logo
 SOURCE: These are extracts from an ASIC document dated 19 February published on the ASIC website.  The subtitle is “Speaking notes from Greg Metcalf, Chairman, ASIC”.  To see CLICK HERE.