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.
Under the new law, the insolvency profession will be subject to mandatory licensing, a first for New Zealand. Practitioners must be of good character, a fit and proper person and have the skills and experience to complete the technical and challenging work of restructuring and insolvency professionals.
RITANZ is New Zealand’s independent self-regulatory body for insolvency practitioners and those working in the field of business reconstruction, turnaround and corporate and personal insolvency. The organisation was established by members of the insolvency profession in response to proposed laws in 2010 that rejected the need for licensing.
RITANZ Chair, John Fisk welcomed the commencement order.
“We’re really pleased that this crucial legislation finally has a new start date – despite initial delays caused by COVID-19. We strongly believe that insolvency practitioners should be recognised as professionals, with standards of experience and conduct to protect and give confidence to those affected by financial failure. Until now, almost any individual could provide insolvency and restructuring services, regardless of their background or capability.
“We’re pleased this new regime will reflect consistently high professional standards and will protect the interests of creditors by ensuring insolvency practitioners are more accountable.”
Fisk adds that RITANZ will have a significant part to play under the licensing regime.
“Insolvency practitioners will need education and professional development in order to maintain their license, and we’ll continue to deliver in these areas. Those members who are new to insolvency are the licensed insolvency practitioners of the future and we’ll provide the necessary education and networking opportunities their careers require.”
“We will also provide support needed to ensure that New Zealanders receive the very best assistance the restructuring and insolvency profession can provide when financial challenges impact them. This year, in light of the wide-ranging impact of COVID-19, those challenges are being more widely felt than ever before.”
RITANZ brought in a self-licensing regime in 2015, in association with the Chartered Accountants Australia and New Zealand (CAANZ), to enable its members to qualify as accredited insolvency practitioners and establish standards.
The new licensing regime will now remove the need for accreditation, as government standards will replace the requirements which RITANZ members are expected to meet.
The Act comes into effect on 1 September 2020.Any individual who is not an AIP must apply for a licence to take on new engagements after commencement and only AIPs are deemed to have a transitional licence until their application has been finalised, and only if they apply for a licence within 4 months of the commencement date.
The full implementation will be enforced from 1 September 2021. There are a range of other amendments to the Companies Act that impact insolvency appointments and these will also come into effect from 1 September 2020.