Commerce and Consumer Affairs Minister Paul Goldsmith has released part one of the review into insolvency law, which discusses and sets out recommendations on the regulation of insolvency practitioners and measures to address the harms of voluntary liquidations.
It is the first of two reports which will be published by the Insolvency Working Group, and it identifies a number of areas where corporate insolvency laws could be improved.
Mr Goldsmith says the working group considers that regulation falls short of ensuring creditors can have confidence that the practitioners handling corporate insolvency are qualified and bound by an acceptable code of ethics.
"The report states the current requirements in place to become an insolvency practitioner are very low and includes a recommendation to license and regulate insolvency practitioners: a significant policy shift. It documents several cases of practitioner dishonesty, incompetence and failures to manage conflicts of interest by insolvency practitioners," he says.
"The report includes a number of recommendations, all of which I am giving serious consideration to. In order to assess the full regulatory impact of the recommendations, such as the effect on competition and the efficiency of the industry if insolvency practitioners are licensed, I am seeking the public's feedback on the report."
Part two of the review will consider voidable transactions and Ponzi schemes. Consultation on the part one findings will run until 7 October 2016.