SINGAPORE - A new law to consolidate Singapore's personal bankruptcy and corporate insolvency regimes will be introduced in 2018, to further boost the Republic's status as a leading centre for cross-border debt restructuring, Home Affairs and Law Minister K. Shanmugam said on Thursday (Aug 24).
The omnibus Insolvency Bill, which is expected to be enacted in the second half of 2018, will streamline and update the laws to provide consistency and clarity, said Mr Shanmugam, who was speaking at the start of the Singapore Insolvency Conference 2017.
Currently, the provisions can be found in two separate statutes: the Bankruptcy Act and the Companies Act.
The new Bill will also implement the remaining recommendations of the Insolvency Law Reform Committee proposed in 2013, such as a framework for the regulation of insolvency professionals.
This major change to Singapore's insolvency framework comes amid the highest global corporate default rates seen in the past year since the 2008 global financial crisis, and defaults of nearly US$1 billion in the Singapore bond market since Nov 2015, said Mr Shanmugam.
A recent study by global consulting firm Oliver Wyman showed that the total amount of debt available for restructuring across key Asia-Pacific markets is estimated at US$250 billion, he noted.
"Out of this, a substantial sum is accessible to Singapore-based service providers," said Mr Shanmugam. "And there are substantial opportunities for professionals - inside and outside of Singapore - in the restructuring eco-system."
He said that with the amendments to the Companies Act, "Singapore now has one of the most flexible and forward looking corporate debt restructuring regimes in Asia".
The amendments, which were passed in Parliament in March 2017, include allowing the High Court to order a moratorium in favour of a firm proposing a scheme of arrangement for debt restructuring.
The moratorium, a temporary protection barring creditors from claiming a firm's assets, will be issued automatically upon application for up to 30 days - with worldwide effect.
In the immediate term, Mr Shanmugam also said that the Government will look at supporting opportunities for training and education to increase the talent pool.
Already, the Singapore Management University, is set to offer undergraduates a cross-disciplinary restructuring and insolvency module in January 2018.
The Singapore Accountancy Commission is also setting up a taskforce to study the restructuring industry, with a focus on training and ensuring high quality professionals, Mr Shanmugam added.
Now in its sixth year, the two-day conference will gather a record 400 participants, including judges and lawyers, from Singapore and around the world.
There will be forums, panel discussions and master classes held at the event at the Marina Bay Sands Expo and Convention Centre.