The second tranche of insolvency reforms, introduced by the Insolvency Law Reform Act 2016 (ILRA) took effect on 1 September 2017, focusing on the way funds are handled and introducing new requirements for creditor meetings and practitioner remuneration.
The first tranche, which commenced on 1 March 2017, focused on registration of, and disciplinary action against, registered liquidators and registered trustees.
The Australian Financial Security Authority (AFSA) and the Australian Securities & Investments Commission (ASIC) both voiced their support of the reforms.
“The insolvency law reforms harmonise the regulatory framework for personal and corporate insolvency and address a number of issues in the insolvency industry and ASIC's role in regulating it,” ASIC commissioner John Price said.
“The changes will enhance trust and confidence in the insolvency profession.”
AFSA’s chief executive and inspector-general in bankruptcy, Hamish McCormick, said that these reforms are an important milestone in the rules governing insolvency in Australia.
“These reforms will support a greater level of consistency and standards across both systems. They will also empower creditors to request information from insolvency practitioners,” he said.
The government also recently created an insolvency practitioner disciplinary committee to assist ASIC in reviewing liquidator registration applications and disciplinary matters.
ASIC’s Corporate Plan 2017-18 to 2020-21 was also released last week, outlining its vision to allow markets to fund the economy and economic growth.
In the report, ASIC outlined what they want to see in various sectors they regulate, including in insolvency.
ASIC reported that they expect registered liquidators to act independently and competently, ensure cost-effective, timely and appropriate outcomes, and perform their role in accordance with proper standards of professional conduct.