(1)

For subsection 1284 (2) of the Act, a security lodged by a liquidator or a liquidator of a specified body corporate may be applied by ASIC in accordance with this regulation to compensate a person who has suffered pecuniary loss due to the failure of the liquidator, or liquidator of the specified body corporate, as the case may be, to carry out his or her duties adequately and properly.

(2)

Subregulation (1) applies whether or not the liquidator has been convicted of an offence in relation to the failure.

(3)

A security must not be applied to compensate a person unless the person lodges a claim for compensation in writing no later than:

(a)

if ASIC has:

(i)

advertised for claims for compensation to be paid out of the security by notice published in accordance with subregulation (4); and

(ii)

specified a date not less than 3 months after publication of the notice;

that date; or

(b)

if no notice is published and paragraph (c) does not apply — 6 months after the person became aware that he or she had suffered the pecuniary loss; or

(c)

if ASIC is satisfied that the claim is a proper claim — a later date that ASIC allows.

(4)

A notice mentioned in paragraph 3 (a) must be published:

(a)

in a newspaper circulating generally in Australia; and

(b)

if ASIC so requires — in a newspaper circulating in a State or Territory where the liquidator performed his or her duties.

(5)

ASIC must give the liquidator an opportunity of being heard before deciding whether a person is to be compensated under subregulation (1).

(6)

For the purposes of this regulation, the amount of pecuniary loss that a person may claim is the amount worked out using the formula:

where:

"loss" means the pecuniary loss suffered by the person.

"costs" means the total of the amounts ASIC thinks are:

(a)

the reasonable costs of; and

(b)

disbursements of a reasonable amount that are incidental to;

making and proving the claim.

"other entitlements" means the amount or value of all money and other benefits paid or payable to the person by someone other than ASIC in reduction of the pecuniary loss.

(7)

A security that is applied by ASIC must be applied:

(a)

where the total of the admitted claims does not exceed the amount of the security — in the payment in full of those amounts; or

(b)

where that total exceeds the amount of the security — in the payment of a proportion of the amount at which each of those claims was admitted.

(8)

The proportion mentioned in paragraph (7) (b) must be the same as the proportion the amount of the security bears to the total of the admitted claims.