What are the more significant disciplinary changes?
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a) Additional grounds for issue of a show cause letter
There are additional grounds for a show cause letter to be issued by the Inspector-General. Five examples of the new grounds are:
- the trustee's registration as a liquidator having been cancelled or suspended
- the trustee owes more than the prescribed amount ($500) of notified estate charges
- the trustee is permanently or temporarily unable to perform the functions and duties of a trustee because of physical or mental incapacity
- the trustee is not a fit and proper person
- the trustee has committed an act of bankruptcy
b) The power of the Inspector-General to direct a trustee to not to accept further appointments if earlier directions have not been complied with etc.
The Inspector-General may, in writing, direct a registered trustee not to accept any further appointments as a trustee, or not to accept any further appointments as a trustee during a period specified in the direction, if:
- the trustee has failed to comply with a direction given to the trustee under section 40-5 (direction to remedy failure to lodge documents, or give information or documents); or
- the trustee has failed to comply with a direction given to the trustee under section 40-10 (direction to correct inaccuracies); or
- a (disciplinary) committee has decided under paragraph 40-55(1)(d) that the Inspector-General should give the direction referred to in that paragraph; or
- *the trustee has failed to comply with a direction given to the trustee under section 70-70 (direction to give relevant material); or
- *the trustee has failed to comply with a direction given to the trustee under section 75-20(1) or (2) (direction to convene a meeting of creditors or comply with requirements in relation to such a meeting).
*Apply only from 1 September 2017.
c) The power of the Inspector-General to Suspend the registration of a Registered Trustee if:
- the trustee is disqualified from managing corporations; or
- the trustee ceases to have adequate and appropriate professional indemnity insurance or fidelity insurance; or
- the trustee's registration as a liquidator has been cancelled or suspended, other than in compliance with a written request by the person to cancel or suspend the registration; or
- the trustee owes more than the prescribed amount ($500) of notified estate charges; or
- the Court has made an order under section 90-15 that the trustee repay remuneration--the trustee has failed to repay the remuneration (note that section 90-15 commences on 1 September 2017); or
- the trustee has been convicted of an offence involving fraud or dishonesty; or
- the trustee lodges a request with the Inspector-General in the approved form to have the registration suspended.