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Corporations Amendment (Insolvency) Bill 2007

Schedule 3 Improving regulation of insolvency practitioners

   

Corporations Act 2001

1  Subsection 595(1)

Omit “a member or creditor of a company”, substitute “another person”.

2  Subsection 595(1)

After “securing the”, insert “first-mentioned”.

3  Subsection 595(1)

Omit “some other person”, substitute “a third person”.

4  Paragraphs 595(1)(a), (b), (c), (d) and (e)

Omit “the company”, substitute “a company”.

5  Subparagraph 1282(2)(a)(i)

Repeal the subparagraph.

6  Subparagraph 1282(2)(a)(iii)

Omit “(i) or”.

7  Paragraph 1282(2)(b)

Omit “the winding up of bodies corporate”, substitute “externally-administered bodies corporate”.

8  Section 1284

Repeal the section, substitute:

1284   Insurance to be maintained by liquidators

             (1)  A person who is registered as a liquidator, or as a liquidator of a specified body corporate, must maintain:

                     (a)  adequate and appropriate professional indemnity insurance; and

                     (b)  adequate and appropriate fidelity insurance;

for claims that may be made against the person in connection with externally-administered bodies corporate.

             (2)  If the registration of a person as a liquidator, or as a liquidator of a specified body corporate, came into force before the commencement of this subsection, subsection (1) does not apply to the person at any time before 1 July 2008.

9  Subsection 1288(3)

Omit “3 years” (wherever occurring), substitute “12 months”.

Note:       The heading to section 1288 is altered by omitting “ Triennial ” and substituting “ Annual ”.

10  After section 1290

Insert:

1290A   Cancellation on certain grounds

             (1)  If a person who is registered as a liquidator, as a liquidator of a specified body corporate or as an official liquidator:

                     (a)  becomes an insolvent under administration; or

                     (b)  becomes disqualified from managing corporations under Part 2D.6; or

                     (c)  contravenes subsection 1284(1);

ASIC may cancel the registration of that person as a liquidator, as a liquidator of that body corporate or as an official liquidator, as the case may be.

             (2)  If ASIC decides under subsection (1) to cancel the registration of a person as a liquidator, as a liquidator of a specified body corporate or as an official liquidator:

                     (a)  ASIC must, not later than 14 days after the decision, give the person a written notice:

                              (i)  setting out the decision; and

                             (ii)  the reasons for it; and

                     (b)  the decision comes into effect at the end of the day on which that notice is given to the person.

             (3)  A failure of ASIC to comply with subsection (2) does not affect the validity of the decision.

             (4)  Subsection (1) does not limit section 1291 or 1292.

             (5)  Sections 1291 and 1292 do not limit subsection (1) of this section.

11  After section 1294

Insert:

1294A   Pre-hearing conference

             (1)  If subsection 1294(1) requires the Board to give a person an opportunity to appear at a hearing and to make submissions to, and bring evidence before, the Board in relation to a matter, the Chairperson of the Board may, if he or she considers that it would assist in the conduct of the hearing to do so, convene one or more conferences with the person.

             (2)  The Chairperson of the Board may allow any of the following persons to attend a conference:

                     (a)  a representative of ASIC;

                     (b)  a representative of APRA;

                     (c)  any other person.

             (3)  The Chairperson of the Board must give written notice of a conference to ASIC and APRA at least 14 days before the conference.

             (4)  At a conference, the Chairperson of the Board may, on behalf of the Board:

                     (a)  fix a date or dates for the hearing; and

                     (b)  give directions about the time within which submissions are to be made to the Board in relation to the matter; and

                     (c)  give directions about the time within which evidence is to be brought before the Board in relation to the matter; and

                     (d)  give directions as to the procedure to be followed at or in connection with the hearing.

12  After subsection 1296(1A)

Insert:

          (1B)  If the Board:

                     (a)  decides to exercise any of its powers under section 1292 in relation to a person; or

                     (b)  decides that it is required to make an order under subsection 1292(7) in relation to a person;

then, in addition to meeting the requirements of subsection (1), the Board may take such steps as it considers reasonable and appropriate to publicise:

                     (c)  the decision; and

                     (d)  the reasons for the decision.

Without limiting this, the Board may make the decision and reasons available on the Internet.

          (1C)  If:

                     (a)  the Board decides to exercise the power under section 1292, or makes the order under subsection 1292(7), on the basis of particular conduct engaged in by the person; and

                     (b)  the person engaged in that conduct in the course of participating in the conduct of an audit on behalf of an audit firm or audit company;

a publication under subsection (1B) may identify the audit firm or audit company.

13  Subsection 1297(1)

Omit all the words after “specified body corporate”, substitute:

comes into effect:

                     (a)  at the end of the day on which there is given to the person a paragraph 1296(1)(a) notice of the decision pursuant to which the order is made; or

                     (b)  at the end of such longer period (not exceeding 90 days) as the Board determines.

14  At the end of Division 3 of Part 9.2

Add:

1298A   Transfer of books

             (1)  If:

                     (a)  the registration of a person as a liquidator, as a liquidator of a specified body corporate or as an official liquidator is cancelled or suspended; and

                     (b)  immediately before the cancellation or suspension, as the case may be, came into effect, the person had in his or her possession one or more books relating to an externally administered body corporate; and

                     (c)  any of the following subparagraphs applies:

                              (i)  the person was a liquidator of the externally administered body corporate;

                             (ii)  the person was a receiver, or a receiver and manager, of property of the externally administered body corporate;

                            (iii)  the person was the administrator of the externally administered body corporate;

                            (iv)  the person was the administrator of a deed of company arrangement for the externally administered body corporate; and

                     (d)  another person is or becomes:

                              (i)  a liquidator of the externally administered body corporate; or

                             (ii)  a receiver, or a receiver and manager, of property of the externally administered body corporate; or

                            (iii)  the administrator of the externally administered body corporate; or

                            (iv)  the administrator of a deed of company arrangement for the externally administered body corporate;

the first-mentioned person must, as soon as practicable, transfer those books to that other person.

             (2)  If the books are in electronic form, they may be transferred electronically.