1. Overarching ethos
We endeavour to foster stakeholder confidence in the personal insolvency system through effective regulation and enforcement activities that are timely, consistent and appropriate.
1.1 Statements of principle
AFSA’s regulatory approach focuses on early resolution of systemic issues by adopting a proactive and preventive approach wherever possible.
The Inspector-General Practice Statement 1 – Regulatory framework (IGPS 1) outlines the core of AFSA’s regulatory ethos.
IGPS 1 and AFSA’s Compliance Program is flexible and continuously under review in line with market conditions affecting stakeholders.
1.2 Whole of industry approach and international best practice focus
AFSA promotes a regulatory environment where all stakeholders play a part in maintaining best practice standards.
AFSA will continue to engage with:
- financial counsellors
- the Commonwealth Director of Public Prosecutions (CDPP)
- Australian Restructuring Insolvency and Turnaround Association (ARITA)
- Personal Insolvency Professionals Association (PIPA)
- Association of Independent Insolvency Practitioners (AIIP)
- Australian Securities and Investments Commission (ASIC) and
- other professional associations and government agencies.
This broad level of engagement ensures all necessary intelligence is available and facilitates the best outcomes for those affected by insolvency.
AFSA will also continue to actively engage with the International Association of Insolvency Regulators (IAIR), and as appropriate other international groups, to facilitate appropriate benchmarking against developments and advances in insolvency regimes in comparable jurisdictions.
2. Strategic focus areas in 2019-20
In the financial year to 30 June 2020, AFSA will focus on the following four areas in its compliance program. These areas have been identified following an evaluation of information and data available to AFSA, as well as through consultation with the profession.
2.1 Debt Agreement Law reform
We will focus on ensuring that debt agreement administrators understand and comply with the new provisions of the Bankruptcy Act, Bankruptcy Regulations introduced by the Bankruptcy Amendment (Debt Agreement Reform) Act 2018, including the new duty for Administrators to refer to the Inspector-General any evidence of an offence under the Bankruptcy Act. This will assist in driving compliance by debtors.
2.2 Independence and Untrustworthy Advisors
Test the work sources for registered practitioners to ensure arrangements are at arm’s-length and in accordance with the performance standards and ARITA/PIPA codes of professional practice.
Continue to take appropriate and available action when Untrustworthy Advisor conduct has been identified.
Identify instances of over-charging and over-servicing using pre-determined criteria, data analytics, and conduct own initiative remuneration reviews where appropriate.
Engage with industry and creditors to increase creditor engagement in the insolvency process.
Engage with professional associations, and individual practitioners and their staff to collectively determine what good culture looks like within the personal insolvency system.
Determine an agreed position on the importance of corporate social responsibility.
Work with professional associations and individual practitioners to positively influence the culture within the personal insolvency system.
Assess culture in the profession generally, and also sample individual firms.
If you have any queries on a matter referred to in this program, please contact us on 1300 364 785 or email regulation [at] afsa.gov.au