Revision of Statement of Insolvency Practice 15
The Joint Insolvency Committee (JIC) is consulting on a revised version of Statement of Insolvency Practice 15 – reporting and providing information on their functions to committees in formal insolvencies and SIP 15 (Scotland) - reporting and providing information on their functions to committees (and commissioners in sequestrations) in formal insolvencies.
The draft SIP has been developed by a JIC working group comprising members of the profession from firms of different sizes with views obtained from creditor representatives.
The current SIP 15’s date back to 2005 so the revised version of the SIP looks quite different from that which is currently in force. The main change is that the new draft acknowledges that creditors should be in a position to make an informed decision on whether they wish to seek nomination. It also recognises that information may be made available to creditors through a variety of mediums.
In revising SIP 15 the working group took the following approach:
· adopting the principles and key compliance standards format used for all new SIPs;
· removing all legislative references;
· futureproofing the SIP by disentangling the information guides from the SIP itself.
In conjunction with R3, updated information guides for each of the insolvency processes have been developed and will be published at the same time the new SIP becomes effective.
It is intended that the revised SIP will apply UK wide.
We look forward to hearing from you with your consultation response.
The consultation closes on 12th September 2016
Revision of Statement of Insolvency Practice 13 - acquisition of assets by connected parties in an insolvency process
The Joint Insolvency Committee (JIC) is consulting on a revised version of Statement of Insolvency Practice 13 - acquisition of assets by connected parties in an insolvency process. The draft SIP has been developed by a JIC working group comprising members of the profession (from firms of different sizes) and creditor representatives.
The current SIP 13 (acquisition of assets of insolvent companies by directors) dates back to 1997, so the revised version of the SIP looks quite different from that which is currently in force. The main change is that the new draft acknowledges that creditors and other interested parties want to know about transactions with connected parties generally and not just those involving directors. It’s proposed therefore that the revised SIP will apply to all connected party transactions in personal and corporate insolvency. There’s questions in the response form asking for views on this approach.
In revising SIP 13 the working group took the following approach:
- drafting the SIP requirements in a proportionate way and without being onerous, recognising that it may apply to low value transactions;
- focusing on a narrative explanation of the transaction rather than prescribing the information which should be disclosed;
- adopting the principles and key compliance standards format used for all new SIPs;
- removing all legislative references with the exception of the definition of connected party;
- using, wherever possible, language which is consistent with Statement of Insolvency Practice 16.
It is intended that this SIP will apply UK wide. We look forward to hearing from you with your consultation response. The consultation closes on 11 May 2016
SIP 13 Consultation Questionnaire (Word)
SIP 13 Disposal of Assets to Connected Parties in an Insolvency Process (Word)
SIP 9 Consultation July 2015
In July 2013, Professor Elaine Kempson published her Report to the Insolvency Service “Review of Insolvency Practitioner Fees”, which concluded that market controls on insolvency practitioners fees where not always working as intended, particularly where there was no controlling secured creditor. That report was followed by an Insolvency Service Consultation on proposals for “Strengthening the regulatory regime and fee structure for insolvency practitioners”. The outcome of that consultation was to suggest a number of changes to the way in which practitioners are both regulated and remunerated.
On 3rd March 2015 the Insolvency (Amendment) Rules 2015 were laid before Parliament, and will come into effect on 1st October 2015. In summary, these rules provide that insolvency practitioners must provide an estimate of their fees in advance of the approval of the basis of their remuneration in respect of those elements that they propose to take on a time cost basis. The rules also provide for the provision of an estimate of the expenses an insolvency practitioner anticipates that they will incur. The new rules will apply to insolvent liquidation, bankruptcy and administration cases commenced after 1st October 2015.
These legislative changes have necessitated a revision of SIP 9, which does not currently cater for the provision of the estimates that will be required by statute as of October.
Changes to SIP 9
The look and feel of the revised SIP 9 differs significantly from the current version of SIP 9 as the emphasis is placed upon the qualitative value of the information provided to creditors (and other interested parties) rather than the format in which that information is supplied, or suggested to be supplied. This represents a significant departure from previous iterations of the SIP; a departure which is explained in more detail in an Explanatory Note. It is proposed to issue the Explanatory Note concurrently with the SIP to assist practitioners in understanding the new regulatory requirements.
The revised SIP adopts the principles and key compliance standards of all new SIPs and all legislative references have been removed. It is intended that this SIP will apply in England and Wales only, as the new legislation does not currently extend to Scotland or Northern Ireland.
The draft SIP and Explanatory Note have been developed by a JIC working group comprising members of the profession (from firms of different sizes) and creditor representatives.
Please send us your comments on the draft SIP and the Explanatory Note by 4th September 2015.
SIP 9 - Consultation draft 2015 (PDF)
SIP 9 - Explanatory note consultation 2015 (PDF)
SIP 9 - Consultation questionaire 2015 (PDF)
SIP 9 - Consultation questionaire fill in using PC 2015 (Word)
SIP 16 Consultation January 2015
The JIC is now seeking views on the revised SIP. As the draft contained in Teresa Graham’s report has been in the public domain for more than 6 months and formed part of the recommendations accepted by Government, the JIC is consulting for a 4 week period and is solely seeking views on whether it will be practical for an insolvency practitioner to comply with the requirements contained in the revised version of the SIP.
Please let us know your views. If you don’t think it will be feasible for an insolvency practitioner to comply with the SIP, please explain why that is the case.
Please direct your response / comments to Alison Curry, Head of Regulatory Standards & Support at: firstname.lastname@example.org, by the consultation closing date of 2 February 2015.
SIP 16 – CONSULTATION DRAFT JAN 2015 (Word)
SIP 16 – CONSULTATION DRAFT JAN 2015 (PDF)
SIP 3 – company voluntary arrangements
In spring 2013, the Joint Insolvency Committee (JIC) consulted on a revised version of SIP 3 for individual voluntary arrangements. At that time the JIC announced that steps were being taken to produce separate SIPs for IVAs and CVAs as these were very different processes. JIC is now consulting on a revised SIP 3 for CVAs.
Changes to SIP3
The look and feel of the revised SIP 3 - CVA differs significantly from the current version of SIP 3 but follows the same format as the draft SIP 3 for IVAs.
The SIP focuses on the statutory responsibilities of the insolvency practitioner when acting as nominee or supervisor, but also recognises that an insolvency practitioner may also propose a CVA. Where the SIP applies only to CVAs proposed by directors the relevant paragraphs are identified as “directors’ proposal”.
The revised SIP adopts the principles and key compliance standards of all new SIPs and all legislative references have been removed. It is intended that this SIP will apply UK wide as there are no jurisdictional issues.
Please send us your comments on the revised draft by 7th January 2014.
Click to Download documents:
Revised SIP 3 (PDF 93KB/5 pages)
Response form SIP 3 - fill in using pen (PDF 77KB/2 pages)
Response form SIP 3 - fill in electronically (Word 40KB/2 pages)