A common insolvency regulator? - submission due 30 July

29.6.10: The Productivity Commission has called for responses by 30 July to its draft report recommending consideration of a common insolvency regulator, to replace ITSA and ASIC. See

http://www.pc.gov.au/projects/study/regulatoryburdens/business-consumer-services/draft

This is a live issue before the Senate inquiry on which IPA has made submissions.

The Commission has also agreed with IPA's submission that the different regulatory treatment of the administration of personal insolvency and corporate insolvency imposes an unnecessary regulatory burden on insolvency practitioners and is impeding the efficient conduct of the insolvency regime.

The report says:

While the Commission acknowledges the existing commitment by ITSA and ASIC to work toward streamlining the administration of corporate and personal insolvency law, the concerns raised by IPA suggest that more needs to be done. The Commission endorses the suggestion of the IPA that a reform task-force be set up to identify possible areas for harmonisation of existing personal and corporate insolvency provisions.

It refers to the current Senate inquiry, saying that, as recognised by previous reviews, it is

"particularly important that, at any time when changes to either legal framework are contemplated, the scope for greater harmonisation or alignment of provisions and processes is always considered. The current broad ranging Senate Economics Committee Inquiry into Liquidators and Administrators, presents one such opportunity. Although focused on the area of corporate insolvency, the Inquiry has touched on a number of inconsistencies between personal and corporate insolvency regulation and the issue of a single insolvency system has been raised. For example, some participants in the inquiry identified aspects of ITSA’s regulation of bankruptcy trustees that could be a good model for ASIC to adopt in its regulation of corporate insolvency practitioners...

In parallel with the deliberations of the reform taskforce that the Commission has proposed, the Government should examine the case for making a single regulator responsible for both areas of insolvency law, including the registration of insolvency practitioners".

The Commission calls for comment on the draft report by Friday 31 July. Any IPA member comment is invited.

Michael Murray IPA Legal Director mmurray@ipaa.com.au