In its report released today (14 September 2010) the Australian Senate Committee that was set up to inquire into liquidators and administrators has recommended that the corporate insolvency arm of ASIC be transferred to ITSA to form the Australian Insolvency Practitioners Authority (AIPA).
In discussing this recommendation (one of many in its 190 page report) the Committee said:
“.. (we have) heard a range of evidence concerning the role and competence of the Australian Securities and Investments Commission (ASIC), the Companies and Liquidators Disciplinary Board (CALDB) and the Insolvency Practitioners Association of Australia (IPAA). The criticism of ASIC’s approach to monitoring the insolvency industry as outlined in chapter 6 of this report is of particular concern for the committee”.
“ASIC has consistently claimed that it has the resources to fulfil its current responsibilities in insolvency matters. It has also admitted that there are areas in which it could improve. Taken together, these comments suggest that ASIC believes it can address these areas without more funding, provided its responsibilities in insolvency are not increased.”
“However, the committee believes that regardless of funding, ASIC is overburdened. The oversight of insolvency practitioners is just one of 13 ‘stakeholder teams’ within ASIC’s organizational structure. Its 2008–09 Annual Report lists six strategic priorities, none of which relate directly to corporate insolvency matters. Understandably, the strategic priority of managing the domestic and international implications of the Global Financial Crisis has consumed much of ASIC’s time and resources.”
“The committee believes that corporate insolvency in Australia needs more priority and prominence in the regulatory framework. This will not be achieved through more funding and responsibilities for the same overburdened agency. Rather, … the committee argues that there is a need to combine the regulation of personal bankruptcy and corporate insolvency under the one body. This would be best achieved by transferring ASIC’s corporate insolvency responsibilities to within the Insolvency and Trustee Service Australia (ITSA). The new agency would therefore be under the Attorney-General’s portfolio.”
For a copy of the full report go to: http://www.aph.gov.au/senate/committee/economics_ctte/liquidators_09/report/report.pdf
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