As the Hon Paul Goldsmith, Minister of Commerce and Consumer Affairs, acknowledged in his cabinet paper, it is important
…for the State to provide the commercial community with a high level of assurance that insolvencies will be administered in a professional manner. This is the case most of the time with most of the hundred or so practitioners who regularly take appointments. However, it appears that there are 10 to 20 practitioners at any one time who consistently fall below reasonable expectations.
The Insolvency Practitioners Bill, which has languished for several years, will now be amended to introduce the licensing regime. Based on recommendations by the Insolvency Working Group, the Government will also amend the Companies Act 1993 and the Receiverships Act 1993 to:
We are pleased that the Government will move ahead with a licensing regime for practitioners. Interestingly, the Ministry of Business, Innovation and Employment did not support the introduction of a licensing scheme. It takes the view that the changes to the Companies Act and Receiverships Act should be sufficient to remedy the issues with the status quo, followed by a review to see whether these changes are sufficient and further practitioner oversight is needed. Like Kensington Swan, however, most submitters on the Insolvency Working Group’s first report supported licensing. We consider that licensing is overdue and that regulation will bring New Zealand into step with other countries and similar professions. To read our submission on the first report, please click here.
The licensing regime will be introduced by way of a supplementary order paper to the existing Bill. We will monitor developments closely as they unfold. For more information, please click here.