ASIC’S DIRECTOR DISQUALIFICATION POWER UNDER SECTION 206F OF THE CORPORATIONS ACT 2001 (CTH) – REGULATORY PROBLEMS AND SUGGESTED REFORMS.

ASIC has an administrative (non-judicial) power under s 206F of the Corporations Act 2001 (Cth) to disqualify a person from managing a corporation (for up to five years). Section 206F is intended to assist ASIC to achieve its regulatory objectives in s 1(2) of the Australian Securities and Investments Commission Act 2001 (Cth) of protecting and promoting the confidence of Australian business participants (including investors and creditors) and enforcing the corporations legislation efficiently and cost-effectively. However, s 206F, in its current form, does not promote those regulatory objectives particularly because there are many uncertainties about the interpretation of the language used in s 206F and these problems have to be resolved on a case-by-case basis. Section 206F should be redrafted in clearer terms so that ASIC has a clearer and a more efficient and effective power to disqualify directors where their conduct in relation to the corporation's failure makes them unfit to be corporate managers. [ABSTRACT FROM AUTHOR]