New insolvency regime comes into effect
The new co-regulatory licensing regime for insolvency practitioners comes into full effect today, requiring all practitioners to hold a licence from the sole accredited front-line regulator, the New Zealand Institute of Chartered Accountants (NZICA).
This finalises the implementation of the Insolvency Practitioners Regulation Act 2019 (the Act), following a transitional period from 1 September 2020.
During that period, practitioners were required to conclude or resign from any ongoing insolvency appointments prior to 1 September 2021, or obtain a licence to continue work on their appointments after the transitional period.
All formal insolvency engagements such as voluntary administrations, receiverships and insolvent liquidations, both ongoing and new, must now be undertaken by a licensed insolvency practitioner. Practitioners must apply to an accredited body to obtain an insolvency practitioner licence. The New Zealand Institute of Chartered Accountants (NZICA) is currently the only accredited body in NZ.
Licensed insolvency practitioner details can be found on the Companies Office register.
CA ANZ NZ Country Head Peter Vial FCA says that the introduction of the new regime is an important milestone for insolvency appointments in New Zealand.
“Insolvency practitioners have a responsibility to ensure that the assets of insolvent businesses are realised and distributed in accordance with clear rules and duties to both the insolvent party and their creditors.”
“The new licensing regime is integral to lifting standards and promoting quality and integrity in the profession.”
“As the front-line regulator we will serve the public by carrying out duties under the Act, including licensing, monitoring, and providing a complaints process to ensure that insolvency practitioners are meeting the required standards.”
It is important to note that solvent liquidations can still be undertaken by qualified statutory accountants and lawyers, as well as by licensed insolvency practitioners.