The first tranche of the changes effected by the Insolvency Law Reform Act 2016 commenced on 1 March 2017.
The main changes address the two main drivers of this reform – ASIC v Ariff  NSWSC 829, and the need for harmonization of the laws between corporate and personal insolvency.
1 March 2017
The new regimes for the registration, regulation and discipline of liquidators and trustees are largely harmonised, at least in the law, and provide a tighter process of practitioner regulation and the registration of new practitioners. Other more minor changes to administration processes also apply. One is significant, the right of a practitioner to sell a voidable transaction claim, the simplicity of the wording of the law belying some potential complications.
There are already difficulties, with the regulators, to be managed by the profession.
As to both harmonization and regulation, ASIC has released a regulatory guide – RG 258 – on the process of liquidator registration and discipline, and insurance. At the same time, AFSA has issued something quite different, for the process of trustee registration and discipline, and insurance. Statutory forms for the same purposes are also different. Bear in mind that that trustees and liquidators are often the same practitioners. This is despite s 10-5 of the Schedules. It is also despite the 2014 Memorandum of Understanding between ASIC and AFSA which addresses the need for harmonization, and in fact refers to the joint release of policy statements.
The regulators’ respective guidance and forms also appear to depart from the legal requirements in places, although the guidance is, as ASIC says, only a guide.
These changes are more ‘niche’ than the following ones in September 2017, but they implement an approach that goes back to the 2010 Senate inquiry. The changes also give new roles to the professional bodies, in what appears to be a government concession to greater co-regulation.
The later law changes are more focused on the rights of creditors, reporting, remuneration and related practice based issues. They deal with the more straightforward issues of process and procedure, and given their long lead time, they are all quite manageable.
In fact, in many cases, as a matter of practice, practitioners could implement some of the new requirements in advance of September, assuming these come within the many discretionary aspects of insolvency practice.
Reporting to creditors is one, responding to reasonable creditor requests and inviting ASIC to creditors’ meeting are others.
We want more please
I have written to the Prime Minister about these reforms, and the need to do more.