The Australian Financial Security Authority (AFSA) and the Australian Securities & Investments Commission (ASIC) have welcomed the start today of the second and final tranche of reforms introduced by the Insolvency Law Reform Act 2016 (ILRA).
The reforms aim to increase efficiency, reduce administration costs and promote market competition in personal and corporate insolvency in Australia.
The latest round of changes focus on the way funds are handled and introduce new requirements for creditor meetings and practitioner remuneration.
Hamish McCormick, AFSA’s Chief Executive and Inspector-General in Bankruptcy, 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.
ASIC Commissioner John Price said, ‘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. ‘The changes will enhance trust and confidence in the insolvency profession'.
AFSA and ASIC continue to work with the Australian Insolvency, Reconstruction and Turnaround Association (ARITA) to prepare for the commencement of the reforms.
The first phase of the ILRA commenced on 1 March 2017 and focused on registration of, and disciplinary action against, registered liquidators and registered trustees.
The personal and corporate insolvency systems in Australia operate separately. The Australian Financial Security Authority (AFSA) is responsible for the personal insolvency system and the Australian Securities & Investments Commission (ASIC) administers the corporate insolvency system.