There has been a lot of interest surrounding the proposed insolvency law reform. As we near the end of 2015 we wanted to provide an update on the status of the Bill and its proposed amendments that promise to have a significant effect on insolvency legislation and practice around Australia.
On 7 November 2014, the Commonwealth Treasury released the draft Insolvency Law Reform Bill 2014 (Cth). The package of proposals was then promoted by the Government as ultimately amending and streamlining the Bankruptcy Act 1966 (Cth) and the Corporations Act 2001 (Cth) by:
- removing unnecessary costs and increasing the efficiency in insolvency administrations;
- enhancing communication and transparency between stakeholders;
- promoting market competition on price and quality;
- boosting confidence in the professionalism and competence of insolvency practitioners; and
- removing unnecessary costs from the insolvency industry resulting in around $55.4 million per annum in compliance cost savings.
Prior to the closing date, the Government received 20 submissions relating to the package of proposals.
On 3 December 2015, the Government introduced and read the Bill for a second time. In addition to the objectives listed above, the accompanying Explanatory Memorandum referred to proposed amendments to the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act) and listed further objectives of the package as:
- aligning the registration and disciplinary frameworks that apply to registered liquidators and registered trustees;
- aligning a range of specific rules relating to the handling of personal bankruptcies and corporate external administrations; and
- improving the powers available to the corporate regulator to regulate the corporate insolvency market and the ability for both regulators to communicate in relation to insolvency practitioners operating in both the personal and corporate insolvency markets.
These amendments will commence on Proclamation. The authors of all of our publications are keeping a watching brief on this reform and will keep you updated about the passage of the amendments in the New Year. Federal Parliament is due to commence sitting in early February 2016.
For more information on these changes and to remain up to date on the progress of the Insolvency Law Reform Bill, please see your subscription of the following products on Westlaw AU, or, for new subscribers, visit the Thomson Reuters’ estore:
- Company Receivers and Administrators (http://www.thomsonreuters.com.au/company-receivers-and-administrators-online/productdetail/56400);
- Australian Bankruptcy Law & Practice (http://www.thomsonreuters.com.au/australian-bankruptcy-law-practice-online/productdetail/50800);
- McPherson’s Law of Company Liquidation (http://www.thomsonreuters.com.au/mcphersons-law-of-company-liquidation-online/productdetail/72271);
- Robson’s Annotated Corporations Legislation (http://www.thomsonreuters.com.au/robsons-annotated-corporations-legislation-online/productdetail/97690);
- Crutchfield’s Voluntary Administration (http://www.thomsonreuters.com.au/crutchfields-voluntary-administration-online/productdetail/85002); and
- ASIC Corporate Investigations and Hearings (http://www.thomsonreuters.com.au/asic-corporate-investigations-and-hearings-online/productdetail/51949).