Senate

Replacement Explanatory Memorandum

(Circulated by authority of the Attorney-General, the Hon Christian Porter MP)

Schedule 4 - Registered trustees

AMENDMENTS TO THE BANKRUPTCY ACT 1966

GENERAL OUTLINE

293. The amendments in Schedule 4 are technical amendments for drafting simplicity, and clarify the Minister's power to make rules under the Practice Rules extends to registered trustees administering debt agreements.

Items 1 and 3 - Subsection 10(1) and subsection 105-1(6) of Schedule 2

294. Subsection 10(1) currently provides that the Minister may delegate all powers under the Bankruptcy Act other than the power to delegate itself under section 10(1).

295. For drafting simplicity, item 1 of Schedule 4 moves the Minister's inability to delegate its power to make rules by legislative instrument (being the Practice Rules) under subsection 105-1(1) of Schedule 2 of the Bankruptcy Act from subsection 105-1(6) to subsection 10(1).

296. To avoid duplication of this provision, item 3 of Schedule 4 subsequently repeals subsection 105-1(6).

Item 2 - At the end of section 20-35 of Schedule 2

297. Section 20-35 of Schedule 2 of the Bankruptcy Act currently provides for the Practice Rules to impose industry conditions on all registered trustees, or registered trustees of a specified class.

298. Items 16 to 18 of Part 2 Schedule 3 insert new subsections 186F(3) and 186G(2A), which provide that the registration of individual and company debt agreement administrators is subject to conditions, and that the Minister has the power to make legislative instruments for the purposes of determining the conditions under new subsections 186F(4) (individuals) or 186G(2B) (companies).

299. The amendments introduced by items 16 to 18 of Part 2 Schedule 3 will enable the Minister to more readily adjust specific debt agreement administrator practice requirements and professional attributes to ensure that debtors and creditors are adequately protected from administrator misconduct or unprofessional practice.

300. To ensure the Practice Rules reflect similar industry conditions for registered trustees administering debt agreements, item 2 of Schedule 4 inserts new subsection 20-35(3) of Schedule 2 to clarify the Minister's power to amend the Practice Rules extends to amendments for the purposes of imposing conditions on registered trustees administering debt agreements.

Item 4 - Application provision

301. Item 4 of Schedule 4 provides that amendments contained in item 2 of Schedule 3 will apply to a person who becomes a registered trustee, or registered trustees who are registered immediately before, the commencement of item 24, being immediately after the end of the period of six months after the Amending Act receives the Royal Assent.