Submissions on proposed major changes to NZ insolvency laws through the Insolvency Practitioners Bill, presently before parliament, closed on 24 August 2018 and the Bill is now listed before the Economic Development, Science and Innovation Committee of Parliament on 6 September 2018.
The changes under the Bill involve the introduction of a co-regulatory arrangement whereby the professional bodies, CAANZ and RITANZ, if approved, would be licensed to regulate their insolvency practitioner members and to carry out various other regulatory functions.
The Registrar of Companies would grant accreditation if satisfied that the relevant professional body would implement and maintain regulatory systems that are adequate and effective and meet other standards. Conditions may be imposed as to the procedures that an accredited body must follow when performing regulatory functions to ensure that its systems and rules are adequate and effective – for example, as to conduct and disciplinary matters including the investigation and hearing of complaints, and the right of appeal. The rules would have statutory force. Transparency of process and accordance with the new law would be required.
RITANZ’s draft Code of Professional Practice, based on ARITA’s 2014 Code, would therefore seem to need adjustment both to accord with the new regulatory and licensing regime, and the other provisions in the Bill impacting, for example, independence and powers of practitioners. Incorporation of the requirements of the accountants’ international code of ethics, including relevant aspects of the new NOCLAR provisions, would also seem to be needed.
The NZ system would resemble that of the UK, whose insolvency code and whose insolvency laws are themselves under major review.
In contrast, Australia’s regime, which NZ rejected, involves insolvency practitioner regulation by ASIC and AFSA, with limited statutory regulation by the industry bodies.