IPs get more time to prepare for Insolvency Law Reform Act
In a major win by ARITA, the Minister for Revenue and Financial Services has agreed to delay the commencement of a portion of the Insolvency Law Reform Act (ILRA).
This decision will avoid the situation where the profession simply would not have enough time to become compliant with the Act by the scheduled commencement date of 1 March 2017.
We understand that while Parts 1 and 2 of the two new Insolvency Practice Schedules (for Corporations and Bankruptcy) will still commence on 1 March 2017, these parts of the legislation are largely concerned with registration and discipline, and can be easily implemented by the profession.
The Minister has agreed to delay Part 3 of the new Insolvency Practice Schedules which relate to the general rules for the conduct of external administrations and bankruptcies. These provisions will not commence until 1 September 2017.
We also understand that parts of Schedule 3 of the ILRA (very specific provisions dealing with matters such as termination of a DOCA and the relation back day) will also still commence on 1 March 2017.
The Government’s caretaker period during the lengthy election stopped all work on the all-important Insolvency Practice Rules, which is likely to push out their formalisation until December 2016.
This would have meant there was no way firms could adjust their IT systems or complete the necessary extensive staff retraining before the scheduled commencement. This extension simply provides a more reasonable time period for compliance.
These issues were first flagged with Government, agencies and regulators by ARITA prior to the election, and have been the subject of sustained action on our part to drive for a more acceptable commencement timeframe.
Read the Minister’s media release