The Insolvency Practitioners Regulation Act 2019 (the Act) introduced a co-regulatory licensing scheme to promote quality, expertise, and integrity in the profession of insolvency practitioners. It is modelled on the voluntary CA ANZ / RITANZ accreditation scheme.
The Act took effect on 1 September 2020.
Under the Act:
- Accredited bodies are responsible for carrying out the frontline regulation of licensed insolvency practitioners, including licensing, regulating ongoing compliance, investigating complaints about them, and taking disciplinary action where appropriate.
- NZICA is an accredited body under the Act.
- NZICA has statutory responsibilities under the New Zealand Institute of Chartered Accountants Act 1996 to regulate the practice of its members in New Zealand.
- The Companies Office Registrar has responsibility for oversight of accredited bodies. Oversight includes accreditation of bodies, ongoing monitoring and reporting, and corrective action to ensure the quality and effectiveness of the accredited bodies' regulatory systems and processes.
- Any person taking new statutory insolvency appointments from 1 September 2020 must have a licence, which includes a transitional licence. It is offence to take new statutory appointments from 1 September 2020 without a licence.
The Registrar maintains a register of licensed insolvency practitioners, which is publicly searchable here.
Who can apply for a licence?
NZICA members with a Certificate of Public Practice (CPP) can apply for a licence.
A non-NZICA member can also apply for a licence if they are either:
- An overseas practitioner; or
- A member of a "recognised body" such as RITANZ; or
- A practising member of a religious society or order whose doctrines or beliefs preclude membership of any organisation or body other than the religious society or order of which they are a member
To be granted a licence, a person must then meet the prescribed minimum standards. They must also be "fit and proper" to hold a licence.
An applicant who is not a member of an accredited body (e.g. NZICA) must also enter a Compliance Agreement with the accredited body. By signing the Compliance Agreement, the non-member agrees to abide by the accredited body's Code of Ethics, Rules, and disciplinary processes. The Compliance Agreement can be found here.
Note that an applicant who signed a Compliance Agreement when obtaining a transitional licence does not need to sign a further compliance agreement when applying for a full licence.
Licences are subject to "licence conditions" covering such matters as ongoing competency and training and compliance with relevant standards relating to insolvency engagements.
Each licence must also include a condition specifying the types of insolvency engagements in respect of which the person is authorised to act under their licence. The Registrar is required to maintain a register of licensed insolvency practitioners.
Applying for a licence
To apply for a licence you will need to complete an application form and complete a fit and proper person declaration (IP 1 – Fit and proper person) which you can download below. You will also need to provide details of your insolvency experience in IP 2 – Practical insolvency experience, which you can also find below.
You will also need to sign a Compliance Agreement if you are not an NZICA member and do not already have a transitional licence.
The Act includes transitional provisions allowing individuals to complete insolvency engagements (as defined in the Act) accepted prior to 1 September 2020 but they must be completed by the end of 1 September 2021. However, a person cannot undertake any new insolvency engagements from 1 September 2020, unless they qualify for a transitional licence.
An accredited insolvency practitioner (AIP) under the CA ANZ/ NZICA/RITANZ scheme can take advantage of transitional licensing provisions. Broadly, the Act can deem an AIP to have a transitional licence from 1 September 2020 which allows the AIP to accept new appointments.
The transitional licence provisions automatically apply to a NZICA member who is an AIP. For an AIP who is not a NZICA member, the transitional licence provisions only apply when the AIP has entered an agreement under the Act with NZICA to be bound by its Rules and Code of Ethics. NZICA must also consider the AIP to be fit and proper and have qualifications and experience to act as an insolvency practitioner. AIP status must be maintained during the transitional licence period.
If you are an AIP NZICA should have contacted, you regarding the transitional provisions. If you have not been contacted, please contact us at [email protected]
An insolvency practitioner does not include a person undertaking solvent liquidations. However, to undertake a solvent liquidation a person must be one- of the following:
- A licensed insolvency practitioner; or
- A lawyer; or
- A qualified statutory accountant (e.g. an NZICA member with a CPP); or
- A member of a professional body recognised under s.69 of the Act. (As at 1 September 2020, the Registrar has not recognised any professional body under this section.)
If you have any questions regarding insolvency practitioner licensing, please contact us at [email protected]