Details of consultations on revisions to Statements of Insolvency Practice and insolvency Code of Ethics are published here.
There are currently no open consultations.
The Joint Insolvency Committee (JIC) consulted on the operation of the interim Statement of Insolvency Practice 6 England & Wales – decision making (SIP 6), which was published on 10 March 2017, effective from 6 April 2017.
The interim Statement of Insolvency Practice 6 superseded and replaced the following Statements, in England and Wales only, from the effective date.
The equivalent SIPs in Scotland and Northern Ireland remain in force.
IPs are aware that legislative changes came into effect on 6 April 2017 with the commencement of the Insolvency (England & Wales) Rules 2016. The consequence of these legislative changes, particularly in relation to the way formal decisions of creditors are obtained, was the Statements of Insolvency Practice listed above (SIPs 8, 10 and 12) were no longer appropriate reflections of expected standards in light of the new legislation, and in some instances would have conflicted with the new law.
The interim SIP 6 was developed by a working party of the Joint Insolvency Committee comprising insolvency practitioners and representatives of HMRC and the Insolvency Service The SIP was approved by the authorising bodies on an interim basis, without the usual public consultation. The decision to do this was taken because of the time constraints of the Rules implementation and the need to ensure that practitioners continued to have an appropriate regulatory framework in which to work, concurrently with the implementation date of the new rules. Therefore, the SIP was issued on an interim basis, with the stated intention that it would be consulted upon, reviewed and amended (if necessary) and thereafter issued in its final form on or around 31 December 2017.
The following approach was used in revising the SIP
The consultation closed on 13 October 2017.
After the consultation closes, the responses received will be reviewed with a view to making any necessary amendments to the interim SIP 6 which, once approved by the authorising bodies, will be issued giving the usual notice period of one month prior to its effective date.
The Joint Insolvency Committee (JIC) consulted on a revised version of Statement of Insolvency Practice 11 - the handling of funds in formal insolvency appointments.
The draft SIP was developed by a JIC working group comprising members of the profession from firms of different sizes with views obtained from creditor representatives including HMRC.
The current SIP 11 dates back to 2007 and is not thought to adequately or fully reflect current practice structures and the banking products used by insolvency practitioners or the practices in which they work. The main change is to provide greater clarity around the need for proportionate safeguards and financial controls, so that creditors and other stakeholders can be confident that funds are held appropriately and securely and that their interests are adequately protected.
In revising SIP 11 the working group took the following approach:
It is intended that the revised SIP will apply UK wide.
We look forward to hearing from you with your consultation response.
The consultation closed on 12 September 2017.
The consultation closed on 25 July 2017.
The Joint Insolvency Committee (JIC) consulted on a revised version of SIP 15.
The consultation closed on 12 September 2016.
The existing versions of SIP 15 date back to 2005 so the consultation draft of the SIP looks quite different from that which is currently in force. The main change is that the draft acknowledges that creditors should be in a position to make an informed decision on whether they wish to seek nomination to a committee. It also recognises that information may be made available to creditors through a variety of mediums.
The revised SIP 15 adopts the following approach:
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.
The Joint Insolvency Committee (JIC) consulted on a revised version of Statement of Insolvency Practice (SIP) 13 - acquisition of assets by connected parties in an insolvency process.
The consultation closed on 11 May 2016.
The draft SIP 13 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 draft SIP looks quite different to the current version.
The main change - 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. The proposal is the revised SIP will apply to all connected party transactions in personal and corporate insolvency. There are questions in the response form asking for your views on this approach.
In revising SIP 13, the working group has taken the following approach:
The intention is for this SIP to be applied UK wide.
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 1 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 1 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.
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.
We look forward to hearing from you with your consultation response.
The consultation closed on 4 September 2015
In June 2014, Teresa Graham presented the report detailing the findings of her review of pre-packaged administrations to Government. The report included a re-draft of statement of insolvency practice 16 and a recommendation that the Joint Insolvency Committee (JIC) consider the redraft of the SIP. Government accepted all the recommendations in the report.
The JIC reviewed the draft contained in Teresa Graham’s report and produced a revised version of SIP 16 for consultation The JIC’s consultation draft was broadly similar to Ms Graham’s and retained the emphasis on a comply or explain methodology with particular emphasis on the role of marketing and the use of appropriately qualified valuers. The draft also acknowledges the existence of the pre pack pool and preparation of a viability statement by a connected party purchaser.
The JIC sought views on the revised SIP. As the draft contained in Teresa Graham’s report had been in the public domain for more than 6 months and formed part of the recommendations accepted by government, the JIC consulted for a 4 week period and sought views solely on whether it was practical for an insolvency practitioner to comply with the requirements contained in the revised version of the SIP.
The consultation closed on 2 February 2015.
In spring 2013, the 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 are very different processes. JIC has now consulted on a revised SIP 3 for CVAs.
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. If 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.
The consultation closed on 7 January 2014.
Trust Deeds are subject to the common law of Scotland and there is a scarcity of legislation to regulate the product. The insolvency profession has worked closely with the Accountant in Bankruptcy, creditors and other stakeholders in developing changes to the trust deed process. You'll be aware that trust deeds have been the subject of two working parties spanning a period of over 18 months. IPs were represented on the working parties, the aim being to identify and agree changes that the profession should make for a more transparent and better process.
Due to the scarcity of legislation to regulate the trust deed process, the RPBs have concluded in that SIP 3A should remain prescriptive, thereby providing much more detail on what is expected in a trust deed than would normally be provided for in a SIP. This should better serve the interests of creditors and of the debtor.
A copy of the draft SIP has been shared with the Accountant in Bankruptcy and some changes offered by her have been incorporated. SIP 3A is now being issued for a consultation period of four weeks. The consultation closed on 19 April 2013.
IVAs are now the most common form of statutory solution for personal debt problems and, as it has been some considerable time since SIP 3 was revisited, the JIC decided, in consultation with the regulators and the insolvency profession, to carry out a review of SIP 3.
The drafting of the SIP now recognises that IVAs and CVAs are very different processes, so this revision focuses purely on IVAs. SIP 3 CVA is currently being reviewed by the JIC and it is the committee’s aim that both SIP 3 IVA and SIP 3 CVA will be introduced at the same time. A separate review of SIP 3A – trust deeds - is also being undertaken.
The SIP focuses on the statutory responsibilities of the insolvency practitioner when acting as nominee or supervisor, but also recognises that diverse practices, from sole practitioners to volume providers, may offer IVAs and that the SIP should work for all kinds of insolvency practice.
The revised SIP adopts the principles and key compliance standards of all new SIPs and all legislative references have been removed.
The look and feel of the revised SIP 3 differs significantly from the current version of the SIP. The consultation closed on 14 May 2013.
SIP 16 is being revised to:
This revision of the SIP is not a major rewrite and does not seek to impose new requirements on insolvency practitioners. The consultation closed on 14 May 2013. The revised version of SIP 16 is effective from 1 November 2013.
The JIC has also chosen to review SIP 13 - acquisition of assets of insolvent companies by directors - in response to concerns voiced in some quarters about connected party transactions and phoenixism.