The Insolvency Law Reform Act 2016 received Royal Assent on 29 February 2016 and comprises reforms to amend and streamline the Bankruptcy Act 1966, the Corporations Act 2001 (Cth) and the Australian Securities and Investments Commission Act 2001.
A key aim of the Act is to restore confidence in the insolvency profession by raising the standards of professionalism and competence of practitioners, and identifying and removing ‘bad apples’ from the profession more swiftly.
The Act aims to:
- remove unnecessary costs and increase efficiency in insolvency administrations.
- enhance communication and transparency between stakeholders.
- promote market competition on price and quality.
- improve overall confidence in the professionalism and competence of insolvency practitioners.
- align the registration and disciplinary frameworks that apply to registered liquidators and registered trustees.
- align a range of specific rules relating to the handling of personal bankruptcies and corporate external administrations.
The Government envisages that there will be a long lead time to prepare for the implementation of the Act (which will include drafting detailed rules for the new system by way of Insolvency Practice Rules). Although the effective date of the new legislation is not yet known, many are predicting a commencement date of 1 July 2017.
June 2016