Under the Insolvency Practitioners Regulation Act 2019, the NZ insolvency profession will be subject to mandatory licensing for the first time. Practitioners are required to have the skills and experience necessary to work as restructuring and insolvency professionals and to satisfy good character and fit and proper criteria.
An Australian insolvency practitioner may be appointed to act in NZ as if they were a NZ licensed insolvency practitioner “authorised to carry out the type of insolvency engagements that corresponds with the type of insolvency work that [they are] entitled to carry out in [their] home jurisdiction”. But they must apply to be licensed under s 9 within 10 days: s 10.
The Insolvency Practitioners Regulation (Amendments) Act 2019 also commences on 1 September 2020.
The Acts introduce a ‘co-regulation’ arrangement, similar to that of the UK, whose comparable regime commenced in 1986; that is, professional bodies will directly regulate their practitioner members and the NZ Registrar of Companies will oversight those bodies.
RITANZ will be one regulatory body. It was established by members of the insolvency profession in response to proposed laws in 2010 that rejected the need for licensing. In response, RITANZ had then brought in its own private self-licensing regime in 2015, in association with Chartered Accountants Australia and New Zealand (CAANZ) to set standards of conduct and provide qualifications to be accredited as insolvency practitioners by those bodies.
The new government licensing regime will replace that private regime.
The NZ law only applies to corporate insolvency. New Zealand’s Official Assignee has long handled all personal insolvencies; a private members bill before the NZ parliament that seeks to change that – the Insolvency (Private Administration of Personal Bankruptcy) Amendment Bill – has yet to be reached for debate. But the Official Assignee shares corporate liquidations with the private profession.
As I have explained in various articles, Australia has a different system, with its personal insolvency practitioners directly regulated by the government regulator, AFSA; and its corporate insolvency practitioners regulated by another government regulator, ASIC.