ANNEX A BACKGROUND INFORMATION ON INSOLVENCY

ANNEX A

BACKGROUND INFORMATION ON

INSOLVENCY, RESTRUCTURING AND DISSOLUTION ACT

1. The Insolvency, Restructuring and Dissolution Act (“the Act”) was passed in

Parliament on 1 October 2018, and assented to by the President on 31 October

2018.

2. The enactment of the Act arose from the Insolvency Law Review Committee’s

(“ILRC”) recommendations in October 2013 for a holistic update of Singapore’s

personal and corporate insolvency and debt restructuring laws. The

recommendations included the enactment of a new omnibus legislation. The

omnibus legislation consolidates the personal and corporate regimes, which are

presently in two separate statutes, into a single piece of legislation. Further

information on the ILRC’s recommendations, as well as the report, can be found

here and here.

3. In May 2015, the Committee to Strengthen Singapore as an International Centre

for Debt Restructuring (“Restructuring Committee”) was formed. The

Restructuring Committee built on the ILRC’s recommendations, made further

recommendations focused on strengthening the debt restructuring ecosystem in

Singapore. Further information on the Restructuring Committee’s

recommendations, as well as the report itself, can be found here and here.

4. Due to the large number of recommendations of the two Committees, a phased

approach was taken to implement the recommendations of the two Committees.

5. First phase: In July 2015, amendments were made to the Bankruptcy Act to create

a more rehabilitative discharge framework for bankrupts, and to encourage

institutional creditors to exercise financial prudence when granting credit (“BA

Reforms”).

6. Second phase: In March 2017, amendments to the Companies Act enhanced

Singapore’s corporate rescue and restructuring processes as well as positioned

Singapore as a regional forum of choice for debt restructuring (“CA Reforms”).

7. Final phase: The Insolvency, Restructuring and Dissolution Act implemented the

remaining recommendations of the ILRC and Restructuring Committee, which

were not enacted in the BA Reforms and CA Reforms, and further reforms to the

debt restructuring regime, pursuant to industry feedback.

8. Since the passing of the Act, extensive work has been undertaken to draft the 48

related pieces of subsidiary legislation for the Act, and effect the necessary system

updates to bring the Act into force.

a. A significant number of subsidiary legislation were entirely new pieces

(including two new standalone Rules of Court setting out court procedure

for corporate and personal restructuring and insolvency proceedings).

b. In addition, a root and branch review had been undertaken in respect of all

the related subsidiary legislation to update and modernise the relevant

provisions.

c. Public and closed group consultations were also carried out for the novel

pieces of subsidiary legislation as part of the drafting process.