The Australian Financial Security Authority (AFSA) is an executive agency in the Attorney-General's portfolio.
We are responsible for Australia’s personal insolvency and personal property securities systems, which provide Australian consumers and businesses with tools to manage financial risk, contribute to investor and business confidence, and provide enhanced access to finance within the economy.
To be a firm and fair regulator and a world-class government service provider that delivers improved and equitable financial outcomes for consumers, business and the community.
To maintain confidence in Australia’s personal insolvency and personal property securities systems by delivering fair, efficient and effective trustee and registry services, and risk-based regulation.
Our outcome and program structure
Figure 1 shows our outcome and program structure for the reporting period, as contained in the Portfolio Budget Statements 2019–20.
We manage the application of bankruptcy and personal property securities laws by delivering high-quality personal insolvency and trustee services and personal property securities services, and through regulation and enforcement.
By delivering these services, and by providing regulation and enforcement, we create an environment in which businesses and the community can assess financial risk and make informed financial decisions. We also support the Australian economy by providing an orderly means to manage personal insolvency proceedings.
Insolvency and trustee services
We assist people who are in financial distress by offering unique and specific expertise in personal insolvency and trustee services that the community, the business sector and government rely on. Our strong industry experience in administering insolvent estates upholds the integrity of the personal insolvency system.
Our collaborative approach, depth of industry-specific knowledge and strong stakeholder relationships inform our trustee services, enabling us to deliver value to creditors by exercising our powers in a commercially sound way.
Our expertise in personal insolvency and trustee services enables us to provide a range of comprehensive and integrated services. We:
act as trustee for personal insolvency administrations—bankruptcies, debt agreements and personal insolvency agreements—and insolvent deceased estates
act as trustee pursuant to court orders, particularly under the proceeds of crime legislation
act as special trustee for government
provide practical information about options to deal with unmanageable debt
preserve the security and integrity of a large volume of personal insolvency records through the operation of a national register.
Personal property securities
The Personal Property Securities Register (PPSR) is a national online register that can provide information to help protect consumers when they are buying personal property.
We use our expertise in combining industry knowledge, legal and financial acumen, technology and a client-centred approach to support the operation of the personal property securities system in Australia. This enables us to deliver innovative solutions in response to the needs of our clients and stakeholders.
Our administration of the personal property securities law fosters confidence in the personal property securities system and supports financial risk management and access to finance within the economy.
We work collaboratively with private-sector service providers, facilitating the development of market-driven and industry-specific software that streamlines access and promotes efficiency, effectiveness and a high level of register usability. Our data management expertise supports this work and strengthens the integrity of our data holdings.
Through our expertise in personal property securities, we deliver a range of services. We:
make administrative decisions to resolve disputes between secured parties and grantors
exercise discretion in response to applications made under the Personal Property Securities Act 2009 (PPS Act)
provide sector-specific information to assist users to effectively use the PPSR
preserve the security and integrity of a large volume of economically significant registration data
operate a national register of security interests in personal property.
Regulation and enforcement
We have considerable expertise in regulation and enforcement of the personal insolvency and personal property securities systems, supported by close, ongoing engagement with business and industry.
We are proactive in managing a wide variety of issues that have the potential to undermine public confidence in these systems. This enables us to effectively respond to issues in a balanced manner and deliver our highly regarded, risk-based practitioner inspection program.
We continue to review our regulatory practices and procedures in support of the government’s deregulation agenda. Our approach to regulation is published in our regulatory framework.
In regulation and enforcement, our key roles are to:
regulate personal insolvency practitioners
investigate alleged Bankruptcy Act 1966 (Bankruptcy Act) and PPS Act offences, and where appropriate, refer matters for prosecution.
This all combines to create an efficient and effective regulatory environment that preserves the integrity of the personal insolvency and personal property securities systems.
We are responsible for administering the following Acts, and associated regulations and rules, which provide a legislative framework for our functions and services:
the Bankruptcy Act 1966
the Bankruptcy (Estate Charges) Act 1997
the Personal Property Securities Act 2009.
We also administer property in accordance with orders made under the Proceeds of Crime Act 2002 and other Commonwealth legislation.
Administrations under the Bankruptcy Act are Part IV—bankruptcies, Part IX—debt agreements, Part X—personal insolvency agreements, and Part XI—deceased estates.
We fulfil each of the following roles created by the Bankruptcy Act 1966:
Inspector-General in Bankruptcy—Our Chief Executive is appointed as the Inspector-General in Bankruptcy. The Inspector-General is responsible for the general administration of the Bankruptcy Act and has powers to regulate bankruptcy trustees and debt agreement administrators, review decisions of trustees and investigate allegations of offences under the Bankruptcy Act.
Official Receiver—On behalf of the Official Receiver, we operate a public bankruptcy registry service with compliance and coercive powers to assist bankruptcy trustees to discharge their responsibilities.
Official Trustee in Bankruptcy—A body corporate created under the Bankruptcy Act, the Official Trustee in Bankruptcy administers bankruptcies and other personal insolvency arrangements when a private trustee or other administrator is not appointed. We provide personnel and resources to ensure that the Official Trustee can fulfil its responsibilities.
The Official Trustee also has responsibilities under the Proceeds of Crime Act 2002, the Proceeds of Crime Act 1987, the Mutual Assistance in Criminal Matters Act 1987, the Crimes Act 1914 and the Customs Act 1901 to control and deal with property under court orders made under those statutes.
The Personal Property Securities Act 2009 creates the role of:
Registrar of Personal Property Securities—At 30 June 2020, our Chief Executive also served as the Registrar of Personal Property Securities. The Registrar maintains the PPSR in compliance with the Act and associated regulations. This includes responsibility for ensuring that the register is operational and accessible. The Registrar has various powers in relation to the PPSR, such as refusing access to the PPSR or suspending its operation in certain circumstances; removing or reinstating data on the PPSR; and conducting investigations into matters for the purpose of performing his or her functions.
Our service users
We have a broad range of service users, as shown in Figure 2.
Our service delivery is informed and supported by close engagement with our stakeholders, including other government agencies, professional associations, and industry and peak bodies, and through our international relationships. In addition, we consider better practice through close engagement with key service delivery partners and international associations.
Engagement provides the opportunity for our stakeholders to contribute as experts in their field, have their issues heard, and participate in the decision-making process.
Our co-design activities enable stakeholders to be part of the process of designing service delivery improvements.
Our engagement with stakeholders encompasses a diverse range of approaches, including:
partnerships to develop co-regulation strategies
facilitating and participating in various forums, such as industry and whole-of government forums
proactively seeking direct engagements
engaging in education programs
using collaboration techniques, such as AFSAsandpit.
We engage with a diverse range of stakeholders, as shown in Figure 3.
Our organisational structure
Our senior executive team is led by the Chief Executive, Mr Hamish McCormick, who was AFSA’s accountable authority throughout the reporting period. Mr McCormick was also Inspector-General in Bankruptcy throughout 2019–20, and was appointed Registrar of Personal Property Securities from 3 March 2020. He is assisted by the following officers, effective at 30 June 2020:
Deputy Chief Executive, Mr Gavin McCosker
National Manager – Client and Digital Services, Mr Peter Edwards
National Manager – Internal Client Services, Chief Operating Officer and Chief Financial Officer, Ms Joanna Stone
National Manager – Insolvency and Trustee Services, and Official Receiver, Mr David Bergman
National Manager – Legal and Governance, and General Counsel, Mr Andrew Sellars
National Manager – Regulation and Enforcement, Mr Paul Shaw.
The structure of our senior executive team is shown in Figure 4.
Groups and divisions
The Deputy Chief Executive Group coordinates and delivers key business-enabling services, including executive support, communications, financial management, information and communications technology, human resource management, security, contract and property management, and client contact services. The group has three divisions:
The Client and Digital Services Division provides a range of services, including managing the operations of the PPSR, statistics, frontline service delivery and supporting digitising of our services. The division works to streamline services through process innovation, informed by the needs of those who use our services. It supports the delivery of effective and efficient digital services across AFSA, with a focus on building the integrity and security of data assets used to support our services and related decision-making.
The Internal Client Services Division is responsible for delivering a range of business-enabling services, partnering with business divisions that regulate Australia’s personal insolvency and personal property securities systems. Key functions include the provision of modern technology to support operational effectiveness and efficiency, sustainable allocation and management of resources, strategic and operational planning, performance reporting, client communications and engagement, and human resource management.
The Insolvency and Trustee Services Division provides information to people about the options to deal with unmanageable debt, and assesses and registers bankruptcy, debt agreement and personal insolvency agreement applications and registered court-ordered insolvency administrations. It issues bankruptcy notices on the application of creditors, and exercises the statutory powers of the Official Receiver. The division also maintains the National Personal Insolvency Index, and handles pre-bankruptcy, most post-bankruptcy and general enquiries. It also conducts preliminary inquiries that identify matters to be investigated for recovery of assets and possible offences. As the Official Trustee, it acts as special trustee for government agencies pursuant to court orders and administers personal insolvencies where no registered trustee has been appointed.
The Legal and Governance Division provides legal advice and support to all areas of our operations. In addition to providing specialist advice on bankruptcy, personal property securities and proceeds of crime legislation, the division advises on administrative law and contracts. The division is also responsible for coordinating, advising on and supporting AFSA’s corporate governance, information governance, and risk and assurance functions.
The Regulation and Enforcement Division operates independently of other functional roles, discharging the regulatory and review responsibilities of the Inspector-General in Bankruptcy under the Bankruptcy Act. The enforcement function is responsible for investigating all alleged offences under the Bankruptcy Act and preparing briefs for prosecution.