Sep 142010
 

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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