On 12 October, CA ANZ provided feedback to Treasury on the Corporations Amendment (Corporate Insolvency Reforms) exposure draft (ED) and accompanying explanatory materials (EM).
Key points from our submission include:
- We welcome these reforms which have the potential to curtail many future pain points for business. However, the complexity of these reforms will increase pressure on practitioners as they will be required to assist small business directors in comprehending all the implications for their business as well as to provide support to management during the process.
- We are concerned that this is a very limited consultation period for such complex reforms. Therefore, we strongly recommend the legislation includes a full and comprehensive review late next year to ensure the reforms are operating as intended and there are no unintended consequences.
- There is a high risk that the general public will not be able to distinguish between a Registered Liquidator (RL) and a small business restructuring practitioner (SBRP) with the establishment of a third class of RL. It is intended that the requirements for an SBRP are not to be as comprehensive as those to become a RL and, as such, it is important that there is a clear distinction between the two.
- We consider it critical that the standards, qualifications and experience of SBRPs are at an appropriately high level, backed by a commitment of professional ethics and standards. Relaxing these standards too much could quite easily lead to inconsistent approaches being taken and poor policy outcomes.
We would like to thank the CA ANZ Insolvency Management Committee for contributing to our submission.
Insolvency reforms to support small business
Exposure draft and accompanying explanatory materials: Read about the reforms as released by the TreasuryRead more