Members will be aware of the new licensing regime that comes into effect on 1 September 2020. As we transition to the new legislation, there will be several immediate changes which will impact on Accredited Insolvency Practitioners that we want to update you on.
Under the legislation, any individual who is not a member of an Accredited Body has to comply with section 57 of the Insolvency Practitioners Regulation Act 2019, in order to be eligible to apply to be a Licenced Insolvency Practitioner and to take Insolvency Engagements as from 1 September 2020.
Section 57 provides for an exemption for overseas practitioners, members of a recognised body, or members of religious societies from the requirement that states you must be a member of an Accredited Body.
The Restructuring Insolvency and Turnaround Association of New Zealand (RITANZ) is pleased to announce a Commencement Order has been made by Parliament today to bring into effect the Insolvency Practitioners Regulation Act 2019 on 1 September 2020, despite an initial delay to the start date due to the impact of COVID-19.
RITANZ has tirelessly advocated for the protection of creditors and licensing of insolvency practitioners over the years and were delighted when the government enacted the Insolvency Practitioners Regulation Act and the Insolvency Practitioners Regulation (Amendments) Act which was set to come into force and effect on 17 June 2020.
The government has released the details of its proposed insolvency law relief package. The proposed changes will be welcomed by directors, many of whom are facing difficult choices about whether and how to continue to trade through the COVID-19 crisis.
The package forms part of the COVID-19 Response (Further Management Measures) Legislation Bill that was introduced yesterday afternoon. The Bill is expected to be progressed quickly, with Parliament’s Epidemic Response Committee expected to report on the Bill by next Tuesday, 12 May 2020.
The Bill is broad in scope and amends or modifies some 45 different pieces of legislation. In this update we focus on two of the proposed changes to the Companies Act 1993: relief from directors’ duties and a new business debt hibernation scheme. We then outline when and how directors might make use of them.
RITANZ, together with leaders in the industry has worked closely with MBIE to provide proposals to address certain corporate governance risks that now exist as a result of the Covid-19 pandemic and the Level 4 lockdown.
We have lobbied for urgent steps to be taken to both provide directors with some comfort that they will not be held liable for actions they take in this period as well as providing mechanisms to assist directors in the period following the lockdown as they attempt to rebuild their businesses.
Following the recommendations in the Insolvency Working Group’s (IWG) second paper in 2017, the government this week released details of further insolvency law reform being proposed for gift vouchers, voidable transactions, preferential employee claims and other changes to existing rules.
Additional discussion on new legislation dealing with ponzi schemes has been deferred for the time being.
The government has accepted many of the recommendations made by the IWG; the professional body for insolvency practitioners, RITANZ, believes most of these are both sensible and prudent. Our view on the key aspects of the changes are:
Article copied with permission from Kensington Swan.
The Primary Production Select Committee has reported back to the house on the Farm Debt Mediation Bill (No 2). The select committee has unanimously recommended that the Bill be passed by the House with some amendments to the original bill. The Bill will require secured lenders, as a prerequisite to taking any enforcement action, to offer mediation to a farmer and participate in the process in good faith. Farmers who are in financial trouble will also be able to initiate mediation regardless of whether a default has occurred.
RITANZ recently met with the Treasurer to discuss Phase 2 of the Reserve Bank Act, in particular whether NZ should introduce Depositor Preference or a Depositor Insurance Scheme, or a combination on both into the Reserve Bank Act. They are calling for public submissions and RITANZ is currently preparing a written submission in this regard.
Please feel free to send us your comments and feedback so that we can incorporate your views into our report.
The full Phase 2 Consultation Document is available here to read.