The Attorney-General and the Parliamentary Secretary to the Treasurer have released an options paper “A Modernisation and Harmonisation of the Regulatory Framework Applying to Insolvency Practitioners in Australia ” which seeks views on various proposals for significant regulatory reform of Australia’s insolvency industry.

The Options Paper responds to the Senate Committee’s report, The regulation, registration and remuneration of insolvency practitioners in Australia: the case for a new framework, which was released on 14 September 2010.

The Senate Committee recommended that the corporate insolvency arm of ASIC be transferred to ITSA to form a new personal and corporate insolvency regulator. The Government will not be accepting this recommendation but the paper examines other options for greater alignment between the corporate and personal insolvency regimes where appropriate.

The Senate Committee also raised concerns about the conduct of the insolvency profession in Australia, including the adequacy of efforts to monitor, regulate and discipline misconduct. The Government has decided to review the current regulatory framework applying to insolvency professionals in Australia. This paper discusses options to improve the framework, including in areas not considered by the Senate Committee, such as funds handling, record keeping and communication with creditors.