Insolvency and Bankruptcy Board of India (Insolvency Professionals) (Amendment) Regulations, 2019

May 13, 2019 | by Avantis RegTech Legal Research Team

The Insolvency and Bankruptcy Board of India (IBBI) on May 12, 2019, has issued discussion paper for comments on Insolvency and Bankruptcy Board of India (Insolvency Professionals) (Amendment) Regulations, 2019.

The Insolvency and Bankruptcy Code, 2016 provides for a class of regulated professionals, namely, Insolvency Professionals (IP), who constitute one of the four key pillars of the insolvency regime, other three being the Adjudicating Authority (AA), the Insolvency and Bankruptcy Board of India (Board), and the Information Utilities (IUs). The IPs play an important role in resolution, liquidation and bankruptcy processes of companies, limited liability partnerships (LLPs), partnership firms, proprietorship firms and individuals. Only a person registered as an IP with the Board can render services as an IP under the Code.

However, several suggestions have been received through public portal and in discussions with stakeholders seeking amendment to the Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016. The suggestions and solicits comments are given on certain issues. The issues are as under:

Issue 1: Certificate of Practice for IPs 

Issue 2: Upper age for Undertaking Processes under the Code

Issue 3: Conflict of Interests in Processes

Issue 4: Professional Association of IPs with Stakeholders

Issue 5: Support Services for a Process

The following amendments in the Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016, are as under:

In Regulation 7(2), after clause (bb), the following sub-regulations shall be inserted, namely:

1)Sub-regulation (bc): hold a certificate of practice issued by the insolvency professional agency with which he is enrolled, before giving his consent to accept any assignment as interim resolution professional, resolution professional, authorised representative, liquidator or a bankruptcy trustee, as the case may be, under the Code;

2)Sub-regulation (bd): ensure that appointment of any other professional, if required, is done at arms’ length relationship, for accomplishment of specific task and for specific period of time, and the task assigned is completed in a time-bound manner and the remuneration fixed thereof is commensurate with the assigned task;

3)Sub-regulation (be): not source any support services from a person other than a recognised insolvency professional entity to which he is partner or director.

In the First Schedule:

(a)After clause 3, the following clause shall be inserted, namely:

3A. An Insolvency Professional shall ascertain whether any conflict of interest arises before giving his consent for acceptance of any assignment.;

(b)clause (23) has been substituted.

Comments may be submitted electronically by May 28, 2019.

They shall come into from the date of publication in the Official Gazette.


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