Compliance programme 2017–18

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 Professionals Association (PIPA)
  • 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) to facilitate appropriate benchmarking against developments and advances in insolvency regimes in comparable jurisdictions.

2. Strategic focus areas in 2017–18

In the financial year to 30 June 2018, AFSA will focus on the following five areas in its compliance programme. These areas have been identified following consultation with the profession. 

2.1 Remuneration and expenses

We will focus on early identification and where possible remedy instances of overcharging or over-servicing by insolvency practitioners. This will be identified and handled through a number of functions including our inspection programme, targeted campaigns, complaint handling process and own-initiative Inspector-General reviews (from 1 September 2017).

We will review dealings with property, particularly strata title property to ensure petitioning creditors costs and conveyancing costs are paid appropriately.   

We will review the expenses taken in debt agreements to ensure they have been paid appropriately. 

2.2 Law reform readiness

We will focus on ensuring that trustees understand and comply with the new provisions of the Bankruptcy Act, Bankruptcy Regulations introduced by the Insolvency Law Reform Act and Insolvency Practice Rules. 

2.3 Independence

We will focus on compliance with the trustee standards under the new Insolvency Practice Rules 2016, Inspector-General Practice Direction 1 – Independence (IGPD 1) (currently being finalised) and the ARITA and PIPA codes of professional practice to ensure practitioners remain independent including with pre-insolvency advisors.

2.4 Administration funds held on trust

We will seek assurance that administration trust funds are reconciled under the relevant provisions and standards. This will be carried out by remote targeted campaign as well as the inspection programme.  

2.5 Information

We will focus on ensuring that information provided by practitioners is accurate, relevant and comprehensible, thereby enabling informed decisions to be made by debtors, creditors and all relevant stakeholders.  

Contact

If you have any queries on a matter referred to in this programme, please contact us on 1300 364 785 or email regulation [at] afsa.gov.au.