Insolvency reform package announced
The Federal Government has announced a package of reforms aimed at modernising and hamronising Australia’s insolvency industry.
A Modernisation and Harmonisation of the Regulatory Framework Applying to Insolvency Practitioners in Australia contains a range of proposals to reform the way insolvency professionals are registered, disciplined and regulated. These proposals will go out to public consultation and form the basis of draft legislation.
Key reform proposals include:
- New powers for ASIC to compel practitioners to answer questions about an administration or their conduct;
- changes to the standards of entry to require practitioners to have undertaken insolvency specific education and a new registration and disciplinary system based on the personal insolvency regime;
- changes to the way information is distributed to creditors and a new right for creditors to remove a practitioner;
- giving creditors the power to pass a resolution capping practitioner fees;
- removing conflicts of interest by preventing practitioners and their related parties from deriving a benefit from the use of disbursements without the approval of creditors.
As part of the reform package, from 1 July 2012, insolvency notices will be required to be posted to a new website to be established as part of the ASIC website, replacing 53,000 newspaper advertisements over the next four years and making it easier for creditors to access information. This measure is expected to save the industry around $15 million over the next four years.
The proposals paper can be found on the Treasury website. Consultation on the proposals paper closes on 3 February 2011.