The new Insolvency, Restructuring, and Dissolution Bill was passed on 1st October 2018 in the Singapore Parliament, and it came into effect in early 2019. Reports reveal that this bill is widely known as the Omnibus bill, and it was brought to the parliament for the first time on 10th September 2018. It consolidates the personal and corporate insolvency laws along with restructuring rules into the same enactment. Other than this, it also updates the legislation for Singapore debt restructuring and insolvency while introducing a larger number of provisions for corporate insolvency.
Financiers, businesses, and advisors that are leading operations in Singapore or are working in association with some Singapore-based counterparties are advised to review the new legislation to understand various provisions. A few noteworthy changes in the omnibus bill are listed below:
- Mandating qualifications, licensing, disciplinary measures, and standards for insolvency practitioners.
- New wrongful provisions for trading with corporate restructuring Singapore.
- Various provisions for standalone voidable transactions for corporate insolvency.
- Permitting commencement of out-of-court judicial management.
- Restricting the operations of various ipso facto clauses on commencement of different insolvency and restructuring procedures.
- Allowing judicial managers to manage proceeds of various claims related to insolvency.
Understand Singapore debt restructuring and corporate restructuring Singapore – How did the Omnibus bill originate in Singapore?
Omnibus Bill contains a series of reforms in the insolvency and restructuring sphere of Singapore. It offers an extensive range of changes to the Singapore Companies Act that was established in May 2017 and includes an introduction to various concepts of the US Bankruptcy code specified in Chapter 11.
History says that the insolvency law in Singapore is mainly derived from old age English law; therefore, it has many common regimes like that of Hong Kong, Australia, and the United Kingdom. The existing restructuring and insolvency legislative framework of Singapore is mainly provided in the Bankruptcy Act and Companies Act, where the first one is relevant to personal insolvency practices and the second one is about corporate insolvency.
The omnibus bill is expected to consolidate specific statutory regulations into single enactment with Singapore debt restructuring procedures. In a press release published in the year 2018, the Ministry of Law at Singapore put more emphasis on the development of common practices and principles for corporate as well as personal insolvency, along with enhanced consistency and clarity to the procedures. The omnibus bill is expected to establish a new regulatory regime and licensing procedure for insolvency practitioners in Singapore. As per new rules, a person may not be allowed to act as a judicial manager, liquidator, or receiver for a corporation unless he/she is duly licensed.
The omnibus bill defines minimum qualifications for holding the license of an insolvency practitioner. It also highlights the process for renewal and grant of insolvency practitioner’s license along with the framework for discipline and control of practitioners. The new bill also introduces wrongful trading provisions with a fresh perspective by replacing the existing insolvent trading regime and corporate restructuring Singapore. The bill also provides some alternative procedures for entry to judicial management while allowing companies to follow ‘out of court’ methods.