Under s22 of the IPRA, the Registrar of Companies may prescribe:
The Ministry of Business, Innovation & Employment (MBIE) has released a discussion paper outlining the proposed minimum standards and conditions for the licensing of insolvency practitioners.
Minimum standards for licensing of insolvency practitioners
MBIE proposes the following minimum standards for licensing of practitioners:
The following licence conditions are proposed:
The current CA ANZ/RITANZ accreditation scheme requires accredited practitioners to complete continuing professional development (CPD) training of 120 hours over three years with at least 30 hours being related to insolvency training. MBIE proposes that where an accredited body is a member of the International Federation of Accountants (IFAC), such as CA ANZ, practitioners will be required to meet IFAC requirements. Where a practitioner is licensed by an accredited body that is required to meet IFAC standards, the practitioner will be required to:
Practitioners who belong to an accredited body that is not a member of IFAC will be required to complete at least 120 hours of CPD training over three years. At least 60 hours of that training will need to be verifiable, of which at least 20 hours must be related to insolvency practice, and a minimum of 20 hours must be completed each year.
Fit and proper person requirements
It will be up to accredited bodies to prescribe fit and proper person requirements for applicants for a licence. The Registrar of Companies will nevertheless consider an accredited body’s overall approach to assessing whether an applicant for an insolvency practitioner licence (and/or membership of the body) is a ‘fit and proper’ person to hold a licence as part of the Registrar’s assessment of the accredited body’s application for accreditation. The Registrar will also monitor how accredited bodies are applying fit and proper person tests.
The Registrar, has indicated in the discussion paper, matters that will likely be relevant to whether a person is ‘fit and proper’. These include:
convictions involving dishonesty;
convictions, sanctions, penalties, fines, declarations, orders, reprimands, or undertakings for any offence under financial markets legislation;
being banned from acting as a director of a company;
being subject to an adverse disciplinary finding by any professional body, disciplinary tribunal, or court;
having an adverse court ruling in respect of a civil case relating to the quality of the practitioner’s professional work or judgement;
having been declined membership of any professional body, or had their membership cancelled or suspended;
having been dismissed, or asked to resign, from a position of trust, fiduciary appointment, or similar appointment;
being placed into statutory management, or being the director of a company placed in statutory management;
having, in the last 10 years:
The Registrar considers that the presence of one of the above matters should not automatically disqualify an applicant from obtaining a licence. Nevertheless, where one or more of the above matters exist, an applicant will need to persuade an accredited body as to their suitability. Where an accredited body declines to issue a licence to a person, or makes it subject to conditions, the person may appeal that decision to the Court.
The proposed standards are sensible and are leveraged off the existing CA ANZ/RITANZ voluntary self-regulation scheme with some modifications. Practitioners who are already accredited CA ANZ/RITANZ practitioners should not be concerned about the proposed standards. For practitioners who do not meet the minimum standards, there is some flexibility for accredited bodies to waive some or all of the requirements in appropriate cases.
How do I have my say?
Submissions on the proposed minimum standards are open until 13 December 2019 and can be made here. MBIE will then consider submissions and publish a Gazette notice setting out the minimum standards for insolvency practitioners in March 2020. The IPRA will come into force on 17 June 2020.