Compliance program 2016-17

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 programme is agile 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
  • creditors
  • debtors
  • the Commonwealth Director of Public Prosecutions (CDPP)
  • Australian Restructuring Insolvency and Turnaround Association (ARITA)
  • Personal Insolvency Professions Association (PIPA)
  • Australian Securities and Investments Commission (ASIC)
  • 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) to facilitate appropriate benchmarking against developments and advances in insolvency regimes in comparable jurisdictions.

2. Strategic focus areas in 2016-17

In the financial year to 30 June 2017, AFSA will focus on the following three areas in its compliance programme. These areas have been identified following consultation with the profession.

2.1 Independence

We will focus on compliance with the trustee performance standards and the ARITA and PIPA Codes of Professional Practice to ensure practitioners remain independent including with pre-insolvency advisors.

2.2 Engagement with creditors

As the ultimate beneficiaries in any personal insolvency administration, creditors and the quality of the outcomes they receive are at the heart of an efficient and effective system. AFSA will continue to engage with creditors with a view to learning in greater detail, from the creditor perspective, what aspects of practitioner practice is capable of improvement.

2.3 Through the eyes of the debtor

Attention will be drawn to review a practitioner’s first point of contact with debtors and bankrupts to ensure advice provided is within legislative and best practice guidelines, in particular in relation to debt agreements.

3. AFSA's Insolvency Practitioner compliance activities

The three strategic focus areas in 2016–17 are complemented by AFSA’s eight core insolvency compliance roles. These core roles and AFSA’s strategic focus within each role is explained in Annexure A.

Annexure A - Insolvency Practitioner compliance activities

No.

Function

IGPS [1] or other web based material

Strategic focus 2016-17

1

Trustee (RT) and debt agreement administrator (RDAA) registrations

(i) IGPS 4 - Guidelines and processes for registration of debt agreement administrators

(ii) IGPS 13 - Trustee registered under the Bankruptcy Act 1966 registration application process

A focus to ensure any deviation from practice is re-mediated effectively and efficiently to maintain high standards of regulation.

2

Inspections

IGPS 11 - Monitoring and inspection of bankruptcy trustees and debt agreement administrators

To explore the benefits of self-assessment and the increased use of e-Inspections to lessen the regulatory burden on practitioners.

3

Proactive monitoring

IGPS 11 - Monitoring and inspection of bankruptcy trustees and debt agreement administrators

Attention will be drawn to review a practitioner's advertising methods and first point of contact with debtors to ensure advice provided is independent, within legislative and best practice guidelines.

4

Guidance

(i) Personal Insolvency Regulator newsletter

(ii) AFSA practices and policies

Quarterly issues of the Personal Insolvency Regulator newsletter.

Consultation and update of IGPS where necessary.

Facilitate practitioner information sessions when deemed necessary.

Publish new guidance series via podcasts.

5

Complaints

IGPS 10 - Complaints handling process for complaints against bankruptcy trustees and debt agreement administrators

Ongoing focus to ensure complaints are outcome focussed and resolved at source wherever possible.

Emphasise gatekeeper approach to identify issues early for debtors and creditors – either resolve or direct to another appropriate agency.

6

Inspector-General Reviews

(i) IGPS 12 - Statutory reviews of trustees' decisions under the Bankruptcy Act 1966 by the Inspector-General in Bankruptcy

(ii) IGPS 15 - Assessment by the Inspector-General of a trustee's remuneration approval request

(iii) IGPS 16 - Reviewing remuneration of trustees and costs of third party service providers

Focus on solutions and guidance to systemic issues identified through Inspector-General reviews of:

(i) practitioner remuneration

(ii) objections to discharge

(iii) income assessments.

7

Disciplinary action

(i) IGPS 9 - Involuntary cancellation of registration of debt agreement administrators and ineligibility process

(ii) IGPS 8 - Involuntary cancellation of trustee registration

Early intervention cultivating productive working relationships with all stakeholders so that proactive action can be taken as appropriate.

8

Investigate and prosecute offences against the Bankruptcy Act 1966

(i) IGPS 18 - Issuing of infringement notices by the Inspector-General in Bankruptcy

(ii) IGPS 14 - Referring offences against the Bankruptcy Act 1966 to the Inspector-General

A focus on the quality of practitioner's offence referrals including pre-referral enquiries (PREs).

Ongoing focus to ensure timely lodging of documents with the Official Receiver in accordance with time-frames stipulated in the Act.

[1] Inspector-General Practice Statement (IGPS) - available publicly on the AFSA website - explains how we go about what we do.

Contact

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 (.)