The ILRA – what insolvency professionals need to know.
What is the Insolvency Law Reform Act?
On 14 December 2011 the then Attorney-General and Parliamentary Secretary to the Treasurer released A Modernisation and Harmonisation of the Regulatory Framework Applying to Insolvency Practitioners in Australia - a proposals paper setting out a pathway to significant regulatory reform of Australia's insolvency industry. Key reform areas in the paper are reflected in the Insolvency Law Reform Act 2016. The Act comprises a package of proposals to amend and streamline the Bankruptcy Act 1966, the Corporations Act 2001 and the Australian Securities and Investments Commission Act 2001. The amendments aim to:
- remove unnecessary costs and increase efficiency in insolvency administrations;
- align the registration and disciplinary frameworks that apply to registered liquidators and registered trustees;
- align a range of specific rules relating to the handling of personal bankruptcies and corporate external administrations;
- enhance communication and transparency between stakeholders;
- promote market competition on price and quality;
- improve the powers available to the corporate regulator to regulate the corporate insolvency market and the ability for both regulators to communicate in relation to insolvency practitioners operating in both the personal and corporate insolvency markets; and
- improve overall confidence in the professionalism and competence of insolvency practitioners.
The reforms will be implemented in two stages. Parts 1 and 2 of the new Insolvency Practice Schedules (for Corporations and Bankruptcy), largely concerned with registration and discipline of insolvency practitioners, will commence on 1 March 2017. Part 3 of the Schedules which relates to insolvency administration processes (including such matters as funds handling, creditors’ meetings and remuneration of practitioners) will commence on 1 September 2017.