The New Zealand Registrar of Companies has approved the first licensing bodies for the commencement of the new regulatory regime for its insolvency practitioners on 1 September 2020. This will require insolvency practitioners operating in New Zealand to be licensed by an accredited body.
NZICA and RITANZ
The Registrar has approved the New Zealand Institute of Chartered Accountants (NZICA) as the first accredited body under the Insolvency Practitioners Regulation Act 2019. It is the statutory body established by the New Zealand Institute of Chartered Accountants Act 1996 and is responsible for regulating NZ resident members of CAANZ.
The Registrar has also approved RITANZ (Restructuring Insolvency & Turnaround Association of New Zealand) as a recognised body under the Act.
As an accredited body, NZICA has regulatory functions under the Act and only it can issue licences. Membership of NZICA is also an avenue by which a person can obtain a licence. RITANZ as a recognised body has no regulatory functions but its membership is one avenue by which a person can obtain a licence from NZICA.
Details about the new regulatory regime for insolvency practitioners are on the NZ Insolvency Practitioners Register website.
An Australian IP is also exempt from NZICA membership requirements but the IP must enter into a ‘written arrangement’ with NZICA under s 58 of the Act in relation to their experience and competency and other attributes. That arrangement is to be binding as if the Australian IP were a member of NZICA.
A form of ‘compliance agreement’ is on the CAANZ website. Among other things, it confirms that certain NZICA Rules set out in section 36 of the Act and NZICA’s Code of Ethics will apply to the Australian IP, including that the IP be bound by findings of NZICA’s Professional Conduct Committee, Disciplinary Tribunal and Appeals Council, and by NZICA’s Engagement Standard for Insolvency Engagements, its practice review requirements and processes, its licence conditions, requirements as to the disclosure of certain information, the payment of fees and charges and the disclosure of certain information.
This may raise some issues for the regulation of Australian IPs. Their conduct outside Australia is presently regulated, at least under the law, by both the Bankruptcy Act 1966 and the Corporations Act 2001: Schedules Div 40 s 40-40(1)(l). As to the regulation of Australian liquidators and trustees acting as foreign representatives overseas, and of foreign representatives (including from NZ) in Australia, see Cross-border regulation of insolvency practitioners (2018) INSLB 55, Murray.