20 Apr 2016 Posted in Press releases
The Committee to Strengthen Singapore as an International Centre for Debt Restructuring, has today released recommendations aimed at enhancing Singapore’s effectiveness in facilitating international debt restructuring.
From today, the Ministry of Law is conducting a 6-week public consultation to seek feedback on the Committee’s recommendations. These recommendations will impact lawyers, accountants, insolvency practitioners, banks and funds, amongst others. The inputs of these stakeholders will help the Ministry better assess and further refine the proposals where appropriate. The consultation is scheduled to end on 31 May 2016.
Strengthening Singapore as an International Centre for Debt Restructuring
- Global corporate defaults have hit their highest levels since the 2008 global financial crisis. Regional law firms have reported a significant increase in insolvency and debt restructuring work. The Committee observes that Singapore has been able to coordinate significant regional restructuring cases because it is a major financial, legal and business hub. It provides businesses a convenient base combining efficiency, expertise and a clear and certain legal framework, from which to coordinate a multi-jurisdictional restructuring.
- To further strengthen Singapore’s effectiveness as an international debt restructuring centre, the Committee has made 17 recommendations in three areas: first, enhancing the legal framework for restructurings; second, creating a restructuring friendly ecosystem; and third, addressing the perception gap.
- To enhance the legal framework for restructurings, the Committee’s recommendations include:
- Creating bespoke rules and procedures for restructuring, to ensure that Singapore’s legal framework can resolve restructurings quickly and cost-efficiently, and delivers high certainty of outcomes.
- Deepening the bench with specialist insolvency judges, who will take an active case management approach to assist in steering stakeholders to successful outcomes; and
- Increasing the use of Alternative Dispute Resolution processes such as mediation or arbitration to resolve insolvency issues where appropriate, as they can result in significant cost savings.
- To create a restructuring friendly ecosystem, the Committee’s recommendations include:
- Increasing the availability of rescue financing, to allow the debtor to continue its business operations as the restructuring is being negotiated; and
- Strengthening the quality of insolvency professionals based in Singapore, to deepen expertise in handling complex cross-border restructuring work.
- To address the perception gap, the Committee’s recommendations include:
- Raising Singapore’s profile on the international stage, through Singapore-based professionals, judges and academics increasing their involvement in international insolvency organisations, organising or speaking at conferences, and/or conducting research on cutting edge issues in this field.
A full list of the Committee’s recommendations is attached here (0.05MB).
- The Committee to Strengthen Singapore as an International Centre for Debt Restructuring was appointed in May 2015 to build on the work of the Insolvency Law Review Committee (ILRC). The ILRC’s recommendations for reforming Singapore’s bankruptcy and corporate insolvency frameworks were broadly accepted by the Government in May 2014.
- Ms Indranee Rajah, Senior Minister of State, Ministry of Law and Ministry of Finance, and Mr Kannan Ramesh, Judicial Commissioner, co-chaired the 17-member Committee which also included representatives from legal and accounting firms, insolvency practitioners, financial institutions and government agencies.
- Members of the public are invited to share their views on the Committee’s report. Interested parties may view the Committee’s report here (6.8MB) and submit feedback in electronic or hard copy form via:
Policy Advisory Division, Ministry of Law
100 High Street
#08-02, The Treasury
Fax: 6332 8842
MINISTRY OF LAW
20 APRIL 2016
Last updated on 29 Apr 2016