Insolvency regulations and guidance archive
Individuals who hold an ICAEW insolvency licence must comply with the insolvency regulations.
Effective from 1 February 2012 - 31 December 2014. Insolvency Licensing regulations and guidance notes. Institute of Chartered Accountants in England and Wales (ICAEW), under section 391 of the Insolvency Act 1986, is a Recognised Professional Body for the regulation of insolvency practitioners. It must have rules setting out how insolvency practitioners will be regulated.
Insolvency practitioners: eligibility and authorisation
- New applicants - eligibility
- Eligibility of overseas applicants
- Application for an insolvency licence
- Licence holders - application for renewal of insolvency licence
- Fees and other costs of authorisation
- Changes in circumstances
- Cessation of authorisation
- Continuing responsibilities after authorisation has ceased
- Compliance with the regulations
- Monitoring and enforcement
- Voluntary cessation of insolvency practice
- Competence and conduct of licence holders
- The committees
- Regulatory action, restrictions and withdrawal of licence
- Insolvency affiliates
The objectives of ICAEW in issuing these insolvency licensing regulations are to make sure:
- insolvency practitioners licensed by ICAEW are fit and proper persons to act and meet acceptable requirements as to education, practical training and experience
- the good reputation of licensed insolvency practitioners with the public is maintained
- the regulations are clear.
These regulations apply to all insolvency practitioners authorised by ICAEW. Guidance is included to help insolvency practitioners to apply the regulations, which take precedence over the guidance.
|Regulations are displayed with a grey frame and are numbered.|
Where defined terms are used in the regulations they are displayed with a dashed underline. This does not apply to the guidance.
Any amendments, either to the regulations or to the guidance to the regulations, will be published in the insolvency newsletter which ICAEW sends to all its licensed insolvency practitioners. Statements of Insolvency Practice are issued separately by ICAEW.
|Insolvency regulation, licensing queries - Insolvency regulation manager +44 (0)1908 546 330|
|Insolvency administration, new applications, licence renewals, bond and cover schedule enquiries - Insolvency administrator +44 (0)1908 546 262|
|Insolvency fees (payment and invoicing queries) - Credit controller +44 (0)1908 546 265|
|Insolvency ethical and technical advice - Technical Advisory Services +44 (0)1908 248 250|
|ICAEW Insolvency website page - www.icaew.com/insolvency|
This chapter deals with the scope and interpretation of the regulations.
Scope and status
|1.1||These Institute to act as insolvency practitioners under the Act and to persons seeking such authorisation.|
|1.2||These regulations are issued by the authority of the Council.|
|1.3||These regulations come into force on 1 January 2004 (with the exception of regulations 3.12 and 3.13 which come into force on 1 January 2005) and supersede the Insolvency Licensing Regulations dated 1 December 1997 as amended.|
|1.4||Where any regulatory or disciplinary action is being taken against an insolvency practitioner by the Institute for actions or omissions arising wholly before these regulations came into force, the Insolvency Licensing Regulations in force at the material time shall apply.|
|1.5||Words and expressions have the meanings given by the Act and the Interpretation Act 1978 unless defined in these regulations. In the event of a conflict the definitions in these regulations take precedence over the Act and the Interpretation Act 1978.|
|1.6||In these regulations words importing the singular number include the plural and vice versa. Words importing the masculine gender include the neuter (as well as, by virtue of the Interpretation Act 1978 as applied by 1.5 above, the feminine). Words importing the neuter gender include both the masculine and the feminine. Section headings are not part of the regulations and are for guidance only. The regulations will be governed by and interpreted according to English Law.|
|1.7||Any references to legislation, regulations, Bye-laws , regulations or other documents will apply to any re-enactment, re-issue or amendment.|
|1.8||In these regulations the following words have the following meanings.|
|Accountancy & Actuarial Discipline Board||The Accountancy & Actuarial Discipline Board Limited or its successors, being the company (or scheme) which has responsibility for operating the investigation and discipline scheme in which the Institute participates pursuant to clause 1(b) (viiA) of the Supplemental Royal Charter of 21 December 1948.|
|Accountant||A member of any accountancy body.|
|Act||The Insolvency Act 1986 and its subordinate legislation including any Rules, Regulations or Orders, as from time to time re-enacted or amended. All references to the Act include, where the context so admits, all equivalent legislation in Northern Ireland (i.e. the Insolvency (Northern Ireland) Order 1989 and its subordinate legislation).|
|agent||A monitoring unit or such other person or body who may from time to time be appointed by the Licensing Committee.|
|Appeal Committee||The Appeal Committee of ICAEW established under the Bye-laws.|
|appointment||The position of office hold held by an insolvency practitioner in respect of an insolvency made under the Act.|
|associate||Associate has the meaning set out in section 435 of the Act.|
|authorisation||The issue of an insolvency licence by ICAEW under these regulations and "authorise" and "authorised" are to be interpreted accordingly.|
|body corporate||Includes a body corporate constituted under the laws of a country or territory outside the United Kingdom or Republic of Ireland. The term body corporate includes a limited liability partnership.|
|business day||A day excluding weekends and United Kingdom public holidays.|
|Bye-laws||The Bye-laws of ICAEW.|
|Charter||The Royal Charter of 11 May 1880 and the Supplemental Royal Charter of 21 December 1948 granted to ICAEW as from time to time modified or amended.|
|controller||A person who, alone or with any associate or associates, is entitled to exercise or control 15% or more of the rights to vote on all or most matters at general meetings of a body corporate, or of another body corporate of which it is a subsidiary undertaking.|
|Council||The Council of ICAEW under Clause 2 of the Supplemental Royal Charter of 21 December 1948.|
|cover schedule||A form defined in the Insolvency Practitioners Regulations 2005 (as amended) upon which an insolvency practitioner enters certain details in relation to his appointment as an insolvency practitioner.|
|director||Any person occupying the position of director (called by whatever name) in a body corporate. Also, any person under whose directions or instructions the directors of the body corporate are used to acting.|
|Disciplinary Bye-laws||The Disciplinary Bye-laws of ICAEW.|
|Disciplinary Committee||The Disciplinary Committee appointed by the Council in accordance with the Schedule to the Disciplinary Bye-laws.|
|employee||Anyone who carries out insolvency work for a licensed insolvency practitioner, including sub-contractors and consultants.|
|group||A body corporate, any parent or subsidiary undertakings and any parent or subsidiary undertakings of any of them.|
|insolvency affiliate||A person granted affiliate status in accordance with these regulations.|
|insolvency experience||The content of the insolvency experience required prior to the grant of an insolvency licence falls into two main categories:
Experience in category (a) may make up the whole of an applicant's insolvency experience requirements. Experience in category (b) may be included in the calculation of insolvency experience but only to a maximum of fifty per cent of the total insolvency experience required by these regulations, the remainder being category (a) experience. However, in the case of a person engaged in insolvency related work in a Recognised Professional Body or the Insolvency Service of the Department of Business, Innovation and Skills or an agent for such a body, category (b) experience may make up the whole of an applicant's three years' experience (provided that the applicant can demonstrate additional experience of category (a) work covering a period of at least two years within the five years prior to the application).
Category (b)1 includes the following:
- the giving of insolvency advice generally;
- work in relation to the role of an advising member in the period immediately prior to commencement of a creditors' voluntary liquidation;
- work in relation to receiverships other than administrative receiverships;
- work of a regulatory nature such as investigating complaints about the conduct of insolvency practitioners or the conduct of directors of insolvent companies, insolvency monitoring, practice review and compliance work relating to insolvency practice or regulation.
Category (b) 2 includes the following:
- work done for banks, other lenders or creditors, such as viability reviews, monitoring of solvency, etc.
- work involved with the turnaround of companies' and/or other company rescue work.
|insolvency licence||An authorisation issued to a member or an insolvency affiliate by ICAEW under the Bye-laws and these regulations for the purposes of the Act and the words 'licence' and 'licensed' are to be defined accordingly.|
|insolvency practitioner||A person acts as an insolvency practitioner and requires authorisation for the purposes of these regulations where he acts:
|insolvency work||The work undertaken by the licence holder himself, and his employees under his direction, in respect of his activities as an insolvency practitioner.|
|ICAEW||Institute of Chartered Accountants in England and Wales.|
|Investigation Committee||The Investigation Committee appointed by the Council in accordance with the Schedule to the Disciplinary Bye laws.|
|licence holder||An individual who has been issued with and continues to hold a current insolvency licence under these regulations.|
|licensing committee||The Insolvency Licensing Committee of the Institute appointed under regulation 4.1 and, where the context so admits, any sub-committee of that committee.|
|meeting||A meeting includes any consideration by the Licensing Committee, through the medium of conference telephone or similar form of communication provided that all persons participating in the meeting are able to communicate simultaneously with each other throughout the meeting. A member of the Licensing Committee participating in any meeting in this way is deemed to be present in person at the meeting and is counted in a quorum|
|member||A member of ICAEW.|
|monitoring unit||The monitoring agent of ICAEW.|
|office holder||A person who acts or has acted as an insolvency practitioner, or a judicial factor on the bankrupt estate of a deceased person or in a corresponding capacity under the law of any country or territory outside Great Britain and Northern Ireland.|
|practising certificate||A certificate issued to a member by ICAEW authorising the member to engage in public practice.|
|principal||An individual in sole practice or any partner or a director of a firm, or member of a limited liability partnership.|
|Professional Indemnity Insurance Regulations||The regulations of ICAEW concerning professional indemnity insurance as may be applicable from time to time.|
|recognised professional body||A body declared by Order of the Secretary of State for Business, Innovation and Skills, or the Department of Economic Development in Northern Ireland, to be a recognised professional body for the purposes of the Act.|
|regulations||These regulations, as amended or modified, which may be cited as the Insolvency Licensing Regulations 2004.|
|regulatory penalty||An amount charged with the consent of a licence holder as a penalty for breaches of these regulations which the licence holder agrees have been committed.|
|Review Committee||The Review Committee of ICAEW appointed by the Council.|
|secretariat||The persons engaged by ICAEW to carry out its functions.|
|targeted visit||A monitoring visit to the office or offices of a licence holder ordered by the Licensing Committee.|
Insolvency practitioners: eligibility and authorisation
The first section of this chapter sets out the eligibility criteria for, and how to become, an authorised insolvency practitioner. Applicants who are not members of ICAEW should refer first to Chapter 6 which explains how to apply for insolvency affiliate status.
This chapter also explains the actions which must be taken by all licence holders to maintain their authorisation as licensed insolvency practitioners. A key purpose of the Act is to make sure that only appropriately qualified persons are authorised as insolvency practitioners. Therefore ICAEW, as a Recognised Professional Body, must have rules to make sure that its insolvency practitioners are fit and proper persons to act and that they meet acceptable requirements as to education, practical training and experience. Persons authorised by ICAEW to be insolvency practitioners are issued annually with an insolvency licence as evidence of their authorisation.
New applicants - eligibility
insolvency practitioner only if it is satisfied that the individual:
|The Licensing Committee would generally regard recent insolvency experience as being that obtained within the three years immediately prior to the application. However, the Licensing Committee may, in some circumstances, consider experience gained in the five years immediately prior to the application. The eligibility requirements in Regulation 2.1a, b and c apply on an ongoing basis.|
|2.1A||A non-appointment taker is not required under these regulations to hold a practising certificate.|
These regulations do not require a "non-appointment taker" to have a practising certificate in order to have an insolvency licence. However, a member may require a practising certificate because he or she is a principal in an accountancy firm.
Non-appointment takers are not authorised to act as office holders. When a non-appointment taker wishes to be appointed as an office holder, he or she must apply to the Licensing Committee to have their licence upgraded. If a member, the individual must also obtain a practising certificate.
All individuals who are not members who wish to hold a licence must become affiliates, regardless of whether they will be office holders.
Eligibility of overseas applicants
|2.2||Applicants holding an overseas qualification will be required to satisfy the Licensing Committee on an individual basis that their education, qualifications, professional status and insolvency experience are sufficient to meet the criteria in regulation 2.1.|
|2.3||When deciding whether an overseas applicant satisfies the requirements of regulation 2.1 the Licensing Committee will have regard to any guidance on the criteria to be applied.|
Application for an insolvency licence
|2.4||An applicant who wishes to be authorised must apply in the manner that the Licensing Committee decides. The Licensing Committee may have regard to any information which comes to its attention. The application must include:
Application forms may be obtained from ICAEW. In addition to the information required by regulation2.4, the form will require sufficient information for the Licensing Committee to be satisfied that the applicant meets the standards required by legislation and by ICAEW. This will include, for example:
|2.5||The Licensing Committee may:
On granting any application ICAEW will as soon as practicable issue an insolvency licence to the applicant. An applicant may apply for a review of a decision to refuse authorisation or to grant it with restrictions or conditions. Details of the review process are set out in Chapter 5.
Licence holders - application for renewal of insolvency licence
|2.6||A licence holder must apply annually to the Licensing Committee for renewal of his licence. The timing, form and content of the application for renewal will be decided by the Licensing Committee and may be amended from time to time. If a licence holder fails to comply with this regulation the licence lapses unless the Licensing Committee is satisfied that there is reasonable cause for the failure to renew.|
|2.7||An insolvency licence will be renewed only if the Licensing Committee is satisfied that the licence holder has continued to meet the eligibility requirements in regulations 2.1a, b and c to act as an insolvency practitioner and continues to meet the requirements of these regulations as to education and practical training.|
|2.8||In considering the licence holder's application for renewal the Licensing Committee must have regard to any information which comes to its attention and may:
The requirement is for licence holders to apply for annual renewal of their licence. All licence holders are required to complete an annual application to renew the licence at the end of the year. ICAEW will as soon as practicable issue an insolvency licence to the licence holder. The licence will normally be effective for a period of twelve months.
A licence holder who has applied for renewal but who has been refused authorisation or granted authorisation with restrictions or conditions may apply for a review of the Licensing Committee's decision. Details of the review process are set out in Chapter 5.
Fees and other costs of authorisation
|2.9||The costs that the Institute incurs in implementing these regulations , including any costs that it is required or has agreed to pay to any other person or body exercising a regulatory or supervisory role in relation to it, will be recovered through fees payable by all licence holder at the times and at the rates set by Council.|
|2.10||The fee is first due when an applicant applies for authorisation.|
If an application is not accepted, the fee will be refunded less an amount reflecting the costs of administration.
|2.11||The amount of any fee and the timing of its payment will be set by Council or any committee to whom it delegates this power.|
|2.12||In addition to the fees referred to above, a licence holder will be required to pay the charges the Licensing Committee makes for a targeted visit to the licence holder's practice. The Licensing Committee will decide how much the charge will be and may fix an amount of deposit that the licence holder must pay before the visit is carried out.|
A licence holder may apply for a review of the amount charged for his targeted visit.
|2.13||If a licence holder has not paid any fee under regulation 2.9 or any deposit or charge made under regulation 2.12 within 30 days of the invoice date, a notice may be sent warning the licence holder that the Licensing Committee may withdraw his authorisation or consider other appropriate regulatory action, including a regulatory penalty.|
If the outstanding amount is not received within 30 days of the notice, the secretariat of ICAEW has delegated powers from the Licensing Committee to withdraw authorisation under regulation 5.12.
Changes in circumstances
|2.14||A licence holder or an applicant for authorisation must notify the Licensing Committee, in writing, as soon as possible and no later than ten business days after becoming aware of any matter which may affect his status as a fit and proper person to hold an insolvency licence.|
|2.15||A licence holder must notify the Licensing Committee as soon as possible after becoming aware of any change in circumstances which might affect his eligibility for authorisation or his ability to accept appointments.|
|2.16||A licence holder must inform the Licensing Committee as soon as possible after becoming aware of:
Cessation of authorisation
|2.17||Authorisation ceases if:
Section 390 of the Act provides that a person is not qualified to act as an insolvency practitioner unless he has appropriate bonding in place and:
|2.18||In agreeing to a request from a licence holder that his authorisation should cease the Licensing Committee may make its agreement subject to such conditions as it may think fit.|
|2.19||The eligibility of a licence holder for appointment is not invalidated by any breach of these regulations except that, where the Licensing Committee has imposed a restriction on the acceptance of appointments, any purported acceptance will be void.|
Continuing responsibilities after authorisation has ceased
|2.20||A person who has held an authorisation from the Institute and who has ceased, for whatever reason, to be an insolvency practitioner and to hold an insolvency licence may still be subject to disciplinary action in respect of his conduct during the time he was authorised or if he fails to comply with any regulation or other obligation having a continuing effect after his authorisation has ceased.|
|2.21||ICAEW's right to recover any unpaid fees or other amounts due from a member or insolvency affiliate under these regulations does not end when a member or insolvency affiliate is no longer authorised.|
|2.22||Where a person who has held authorisation from the Institute has ceased, for whatever reason, to be an insolvency practitioner and/or to hold an insolvency licence and where the Institute is a proper person for the purposes of making an application to the court for the transfer of the appointments held when the member or insolvency affiliate was authorised, the Institute has the right to recover all legal and other professional fees or other amounts arising from such action from that person, irrespective of whether he has ceased, for whatever reason, to be a member or insolvency affiliate.|
|2.23||Where a member or insolvency affiliate has ceased to be authorised and has ceased to be a member of the Institute or an affiliate (whether under these regulations or otherwise), he continues to be subject to the requirements of regulations 2.24 and 2.25, irrespective of the cessation of membership or affiliate status.|
The effect of regulation 2.20 is that a member or insolvency affiliate cannot escape disciplinary action by ceasing to be a licence holder. If, in the process of de-authorisation, the Licensing Committee places a condition on a member or insolvency affiliate and that condition is broken, then disciplinary action may be taken.
Ceasing to be a licence holder does not remove the obligation of a member or insolvency affiliate to pay outstanding fees and to provide information and returns concerning appointments.
ICAEW, under the insolvency legislation, is able to make applications to court for the transfer of cases from insolvency practitioners whom it authorises. Such transfers may arise both during the period of a licence or after a member or affiliate has ceased to be authorised.
ICAEW will recover the costs of such transfers from the former insolvency licence holder. Please note that this is a contractual requirement and is contained in the application form which is signed by all those who apply to ICAEW for a licence. It is also incorporated, as a reminder, in the annual renewal form.
Compliance with the regulations
|2.24||A licence holder must comply with these regulations and any orders made under these regulations or undertakings given under regulation 5.4. In deciding whether a licence holder is in breach of these regulations or such orders or undertakings, the Licensing Committee will have regard to any guidance concerning insolvency practice issued or endorsed by the Institute.|
All those involved in insolvency work should be aware of the need to comply with these regulations and the Act. A licence holder who is a principal should therefore establish and maintain procedures to bring these matters to the attention of those principals and employees.
A licence holder who is not a principal should endeavour to ensure the firm has such procedures in place.
Monitoring and enforcement
|2.25||Subject to regulation 2.23 a licence holder must provide such returns, statements and other information as the Licensing Committee considers necessary. These must be in the format decided by the Licensing Committee.|
|2.26||The Licensing Committee will monitor a licence holder's compliance with these regulations . Monitoring will include periodic reviews of the returns required under these regulations and visits which may be conducted by the Institute or by its agent . The form, content and timing of monitoring and of monitoring visits (including targeted visit ) will be decided by the Licensing Committee from time to time.|
|2.27||Following any meeting held as part of a monitoring visit, the licence holder must, within 14 days of a request, provide a copy of his notes of the meeting to the Institute or its Agent. The notes should deal with the issues raised at the meeting and may be considered by the Licensing Committee.|
|2.28||The costs of routine monitoring visits by the Institute or any agent will be included in the fee payable under regulation 2.9. The costs of a targeted visit ordered by the Licensing Committee will be payable by the licence holder subject to that visit in accordance with regulation 2.12.|
A visit will be carried out in accordance with the monitoring standards agreed from time to time by ICAEW with the Secretary of State. A copy of the Principles for Monitoring can be found on the Insolvency Service website, www.insolvency.gov.uk.
The costs of a targeted visit will depend on the time spent in carrying out the visit and in writing the report. The current rate will be notified to a licence holder in advance of the visit. Under regulation 5.21, a licence holder may apply for a review of the costs of a targeted visit, to be carried out when the visit has been concluded, but this will not stop the visit taking place.
Voluntary cessation of insolvency practice
|2.29||Where a licence holder wishes to cease acting as an insolvency practitioner, he must inform the Institute of this fact. The licence holder may achieve this by requesting either:|
An insolvency practitioner may voluntarily cease acting as an insolvency practitioner in one of two ways. The first way is where a practitioner decides to cease practice completely.
Where a practitioner retires from practice completely, he should ensure that appropriate arrangements are made for a transfer of any outstanding cases to another practitioner, and should inform ICAEW of any such arrangements.
The second way ( regulation 2.29(b), a conditional licence) is designed to enable a practitioner who wishes to cease acting as an insolvency practitioner to do so in an orderly manner. This may be particularly convenient to persons who are selling their practices and/or who wish to pass cases across to a new appointment taker in an orderly fashion. Such a licence is conditional in that the licence holder cannot accept any new appointments. It may be granted for a period of up to 24 months.
Practitioners who are retiring should transfer or close their cases in a timely manner. If cases cannot be dealt with within 24 months they should be transferred to another insolvency practitioner prior to the end of the 24 months. If a licence holder wishes to extend the period of his conditional licence he should apply to the Licensing Committee, stating the reason why it is necessary for an extension of the licence. Additional conditions may then apply.
Competence and conduct of licence holders
This chapter explains the steps which licence holders should take to ensure that they remain fit and proper persons to be authorised. This includes the requirements for Continuing Professional Development and the ethical and technical matters which must be observed by every licence holder.
Competence and continuing professional development
|3.1||A licence holder must maintain an appropriate level of competence in the conduct of insolvency work.|
|3.2||A licence holder must make arrangements so that all principals and employees involved in insolvency work for which the licence holder is responsible, are competent in the conduct of such work.|
|3.3||A licence holder must:
ICAEW's guidance on continuing professional development is contained in Regulations, standards and guidance online.
|3.4||When it considers the fit and proper status of a licence holder the Licensing Committee will take into account whether his procedures are adequate to ensure that he is fully aware of all relevant statutory obligations and guidance.|
Professional integrity and independence
|3.5||A licence holder must at all times conduct insolvency work with integrity and objectivity.|
|3.6||A licence holder must take steps to prevent individuals who are not insolvency practitioners from being able to exert undue influence over the acceptance of an appointment or the way in which an appointment is conducted.|
Before accepting an appointment a licence holder must have regard to the Code of Ethics, the Guidance for Members in Practice, Statements of Insolvency Practice and insolvency guidance notes issued by ICAEW.
|3.7||A licence holder must comply with the requirements of the Act and any other relevant legislation.|
|3.8||In accordance with the Insolvency Practitioners Regulations 2005 (as amended) and Insolvency Practitioners Regulations (Northern Ireland) 1991, licence holders are required to maintain records of their appointments and to notify the Institute of the place where insolvency case records, including details of appointments, and all papers relating to their insolvency work are kept.|
Details of the place where records are kept are notified to ICAEW or its agent annually and a licence holder is obliged to notify ICAEW or its agent of any changes during the course of the year.
|3.9||A licence holder must comply with Statements of Insolvency Practice issued under the authority of the Council.|
|3.10||A licence holder must have regard to guidance produced and/or promulgated by the Department of Business, Innovation and Skills and the Institute.|
|3.11||A licence holder must establish and maintain procedures designed to ensure that:
|3.12||A licence holder must make sure that there are adequate procedures and supervision in place to comply with these regulations in relation to the conduct of insolvency work for which he is responsible. 1|
All those involved in insolvency work should be aware of the need to comply with these Regulations and the Act.
Licence holders should ensure that systems are in place so that all principals and employees involved in insolvency work maintain adequate ethical and technical standards and consult on ethical, technical or practical issues as appropriate. Such consultation may be with the licence holder or otherwise. The licence holder must be satisfied that the procedures are adequate to ensure his compliance with the Act, relevant technical standards, the Ethical Guidance and these Regulations.
It is important that a licence holder who takes appointments has in place arrangements to ensure that in the event of his incapacity, loss of licence or death another licensed insolvency practitioner may act as his alternate.
|3.13||A licence holder must review and record, at least once a year, the effectiveness of his own and/or his firm's quality control procedures and compliance with these regulations. 2|
Licence holders should establish and maintain quality control procedures, including as a minimum an annual compliance review which they consider appropriate to their circumstances, having regard to statutory requirements, technical standards and insolvency guidance notes.
A thorough review of a licence holder's work can bring benefits and assurance far in excess of this requirement. If appropriately carried out, it could highlight practical ways for a licence holder to improve procedures and to deliver a better service.
The review can identify situations where improvements in procedures can have benefits not only for the licence holder but can also ensure that the firm and the licence holder are not needlessly exposed to risk through poor work, whatever its cause.
The annual review should cover the licence holder's obligations under these regulations and this should include the licence holder's continued eligibility for authorisation, the maintenance of appropriate standards of competence and the conduct of insolvency work.
The latter should also consider the licence holder's compliance with his own or his firm's internal compliance procedures and should encompass a "cold" file review of insolvency work.
This is a review after the particular work which is to be reviewed has been completed, to check that it was conducted in accordance with the licence holder's (or his firm's) procedures.
How many and which files should be cold reviewed is a matter for the licence holder to consider, taking into account factors such as the employees or principals involved with the case, high-risk cases or high profile cases. Definitive guidance cannot be given on the number of cases to be reviewed.
One approach to this question of frequency is simply to review the work of every licence holder each year. Completed files would be selected and reviewed to make sure that the statutory requirements, Statements of Insolvency Practice and the firm's procedures had been followed. For many licence holders, particularly in smaller practices, this may be the easiest procedure to adopt.
In multi-office firms a different approach may be necessary and it may be appropriate for quality assurance/compliance review programmes to be adopted on a structured risk management approach.
Some insolvency practitioners operate within larger general practices. It is likely that the general practice will already be undertaking regular quality assurance/compliance reviews.
In many such firms, a rolling cycle of compliance reviews has been adopted and this can be carried over into the insolvency area. Insolvency practitioners are encouraged to co-ordinate their own reviews with that of the firm. Results of annual compliance reviews should be disseminated to all partners and staff involved in the specific discipline. It is consequently the responsibility of individual insolvency practitioners to consider the results and implement, if appropriate, the specific action points arising from such reviews.
There is no need for the licence holder to conduct the review himself. Some licence holders may find it more practical and cost-effective to use a service provided by an external organisation or provided by another licence holder. However, using an external reviewer does not reduce the licence holder's own responsibility for the review or for ensuring that any necessary action is taken. Licence holders may also benefit from reviewing another licence holder.
The compliance review, and cold file reviews carried out as part of that review, are likely to vary in formality according to the size of the firm. However, every licence holder should be able to provide evidence of the review and, where appropriate, any action taken.
All relevant principals and employees should be informed of the results of the monitoring exercise at the earliest opportunity. If improvements are needed, any necessary changes should be made as soon as possible.
The licence holder should be satisfied that where issues arise out of the review there is a system in place to ensure that appropriate action is taken.
In order to place reliance on the practitioners own (or in larger firms the firm's own) compliance review, ICAEW or its agent would seek, during its monitoring visits, to re-perform part of the work undertaken. If reliance can be placed on the practitioner's own review, the benefit of this approach will be to enable ICAEW or its agent to focus on the action the practitioner has taken to address any matters arising. This approach would lead, over time, to a reduction in the duration of monitoring visits allowing ICAEW or its agent to undertake shorter, more focussed visits.
Disclosure of status
|3.14||A licence holder must disclose as soon as possible to those he is in contact with in connection with his insolvency work that the Institute licenses him.|
This is most easily achieved by expressly referring to the insolvency practitioner's licensing body on the headed notepaper of the firm, but may be by other means such as information on a website or in documents available to a client or potential client. This should identify clearly to whom the licence has been issued and to comply with the EU Services Directive, the insolvency practitioner should also disclose that he is licensed in the UK. Guidance on letterheads is provided on ICAEW's website, uatsc7.icaew.cominsolvency.
This chapter describes the various committees involved in the regulatory process and their powers and responsibilities. Some, but not all, of the powers may be delegated by the Licensing Committee either to sub-committees or to the secretariat.
Insolvency Licensing Committee - composition
|4.1||An Insolvency Licensing Committee (the Licensing Committee) will be appointed by the Council.|
|4.2||The Licensing Committee must:|
|4.3||The Licensing Committee is responsible for:
|4.4||Except where regulation 4.5 applies, the Licensing Committee may delegate its powers to the Chairman, secretariat or an Agent .|
|4.5||The Licensing Committee cannot delegate the power to:
The Licensing Committee may delegate some of its duties but regulation 4.5 reserves certain specified decisions to the Licensing Committee itself.
The ability to request undertakings is one area which the Licensing Committee may delegate to the secretariat or an agent. Undertakings provided to the secretariat or ICAEW's agent will be regarded as provided to the Licensing Committee.
|4.6||The Licensing Committee may require a person who has held an authorisation from the Institute and who has ceased, for whatever reason, to hold an insolvency licence, to submit the returns required under regulation 2.25 until all of his appointment s have been closed or transferred to another insolvency practitioner.|
Disclosure of information
|4.7||In exercising its powers under these regulations the Licensing Committee will treat all information as confidential but may disclose any information if it considers it appropriate in the following circumstances:
|4.8||The Licensing Committee is responsible for determining whether applicants and/or licence holders authorised by the Institute are fit and proper to act as insolvency practitioners. In carrying out its duties under these regulations, in addition to the information the Institute as a Recognised Professional Body is required to consider, the Licensing Committee, the secretariat or an Agent may take into account such information as it thinks fit, including the following:
|4.9||Any previous disciplinary finding, conviction, decision, sentence or judgement (including criminal and civil court decisions) may be considered but will not be re-opened before the Licensing Committee, the Review Committee or the Appeal Committee.|
Notification to committees
|4.10||Subject to regulations 5.6 to 5.10, the Licensing Committee must inform the Investigation Committee about any fact or matter where, in the opinion of the Licensing Committee, any person may have become liable to disciplinary action under the Bye-laws arising from a breach of these regulations or otherwise.|
|4.11||The Investigation Committee will inform the Licensing Committee about any fact or matter which appears to it to be relevant to the powers and duties of the Licensing Committee under these regulations.|
Disciplinary action is a separate matter from any regulatory action, which may be taken by the Licensing Committee, and vice versa.
The Review Committee
|4.12||Certain matters decided by the Licensing Committee, as described in regulation 5.21, may be considered afresh by the Review Committee. The Review Committee may then carry out any of the responsibilities of the Licensing Committee under regulation 4.3 and may make any order that the Licensing Committee can make. In carrying out its duties regulation 4.3(o) applies to the Review Committee as it applies to the Licensing Committee.|
Licence holders or applicants may ask the Review Committee to reconsider a Licensing Committee decision. This request must be made within a specified time period. Chapter 5 gives further details of how the review process works.
The Appeal Committee
|4.13||Appeals against orders of the Review Committee will be decided by the Appeal Committee.|
If a licence holder or applicant is dissatisfied with a decision of the Review Committee, he may apply for the case to be heard before the Appeal Committee. This request must be made within ten business days of the decision being given to the licence holder.
Unlike applications for a review, the Appeal Committee will only hear an appeal on one of a number of specified grounds. It will not reopen the case from the beginning. The specific grounds and detailed procedures are given in Chapter 5.
The procedures of the committees
|4.14||Subject to the Act, the Bye-laws and these regulations, the Licencing Committee, the Review Committee and the Appeal Committee may, in carrying out their duties under these regulations, decide on their own procedures.|
Representation before committees
|4.15||Only the following may attend a meeting of the Licensing Committee:
|4.16||At meetings of the Review Committee and the Appeal Committee any of the licence holder, a representative or Agent of the Institute may attend and be legally represented. Witnesses may be present at the Review Committee and the Appeal Committee in accordance with the committees' procedures or regulations.|
Regulatory action, restrictions and withdrawal of licence
This chapter explains how the Licensing Committee can take regulatory action against a licence holder, including withdrawal of authorisation if necessary.
Regulatory decisions come into effect as set out in regulations 5.17 and 5.18.
A licence holder may ask for a review of a decision made by the Licensing Committee provided that he does so within ten business days of the decision being sent to him.
|5.1||A licence holder who cannot comply with any one or more of these regulations must tell the Licensing Committee in writing. This must be as soon as possible after the situation arises. The notification must say what has happened and the action which the licence holder proposes to take.|
|5.2||If the Licensing Committee considers that any steps being taken will remedy the non-compliance, it may grant dispensation from the requirements to comply with any of these regulations. The period will depend on how long the Licensing Committee considers the licence holder will need to remedy the non-compliance. The dispensation may be extended at the Licensing Committee's discretion but may not last for a total of more than 90 days without review by the Licensing Committee, starting from the date that the non-compliance first arose.|
|5.3||The Licensing Committee will not grant a dispensation under regulation 5.2 unless the licenceholder can satisfy the Licencing Committee that he remains a fit and proper person to act and that his continued authorisation during the dispensation period would not be prejudicial to the public interest.|
|5.4||If requested to do so, the licenceholder shall provide an undertaking to the Licencing Committee or its Agent in such terms as it may decide.|
An undertaking is an assurance (or a promise) that the licence holder will either follow or cease a particular course of action. Undertakings will frequently be given to an agent as a result of a monitoring visit. Failure to comply with an undertaking is likely to be considered incompatible with the standards expected of an insolvency practitioner. The Licensing Committee may delegate the authority to request an undertaking to the secretariat or an agent under regulation 4.4.
Restrictions and conditions
|5.5||The Licencing Committee may impose such restrictions or conditions on the accepting of appointments or the conduct of insolvency work by the licenceholder as it decides are appropriate if it considers that:
The Licensing Committee may, if satisfied that the public interest does not require it, decide that it is not appropriate to refer a failure to comply with these regulations to the Investigation Committee. Instead, with the agreement of the licence holder, the Licensing Committee may impose a regulatory penalty. The following regulations explain this process.
|5.6||The Licencing Committee may propose a regulatory penalty to a licenceholder subject to the following:
|5.7||Any representations made by the licenceholder will be considered by the Licencing Committee. It may then vary the amount or terms of the proposed penalty.|
|5.8||If the licenceholder accepts the penalty under regulation 5.6.(c) the Licencing Committee:
|5.9||Details of any penalty accepted and the order made will be kept by the Institute and the Licencing Committee may, if it wishes, take that information into account in the future.|
|5.10||If a licenceholder does not agree that the breach has been committed or does not agree to the terms of the penalty proposed, or fails to comply with the terms of the penalty, the Licencing Committee shall inform the Investigation Committee of the licenceholder's potential liability to disciplinary action in accordance with regulation 4.10.|
|5.11||There are no rights of review or appeal against a regulatory penalty.|
Regulatory penalties maybe used for example, where:
Once a regulatory penalty has been accepted, there will be no further regulatory or disciplinary action in respect of the breaches referred to in the penalty. The details of the regulatory penalty will however be put on the licence holder's record and may be taken into account in the future. A failure to comply with the terms of a regulatory penalty or to pay the amounts due under it will be reported to the Investigation Committee.
Withdrawal of authorisation
|5.12||The Licencing Committee may withdraw a licenceholder's authorisation if it finds that:
|5.13||If a licenceholder seeks a review under regulation 5.21 of a decision of the Licencing Committee made under regulation 5.12, the Licencing Committee may impose such restrictions and conditions on the accepting of appointments and the conduct of insolvency work by the licenceholder as it decides are appropriate and/or in the public interest, until such time as any review or appeal procedures are concluded.|
|5.14||The Licencing Committee may withdraw a licenceholder's authorisation under regulation 5.12 without prior notice to the licenceholder . This may be done if the Licencing Committee considers that a delay in making such an order might be materially prejudicial to the public interest. An order made by the Licencing Committee under this regulation comes into effect when made and is not stayed by any application for review or appeal.|
|5.15||A licenceholder whose authorisation is withdrawn under regulation 5.14 will be allowed an opportunity, within ten business days of service of the order, to make oral or written representations to the Licencing Committee. Having considered any representations the Licencing Committee may:
Regulation 5.14 allows the Licensing Committee to take immediate regulatory action if the need arises. The Licensing Committee is likely to do this if there are serious allegations of fraud or other criminal activity or if there is an actual or potential loss of client money or estate money. As well as making immediate representations, a licence holder may apply under regulation 5.21 for a review of an urgent order made under regulation 5.14. However, the order comes into force when it is made and is not suspended if a review or appeal is requested.
Implementation of orders
The following regulations explain when an order or decision comes into effect.
|5.16||An order or decision made under the following regulations will come into effect as soon as notice is served upon the licenceholder:
|5.17||An order made under regulation 5.12 for the withdrawal of a licence will come into effect ten business days after notice of it is served on the licenceholder or any later time that the committees specify, except where the licenceholder applies for a review or appeal under 5.21.|
|5.18||If a licenceholder:
However, in the public interest, the Licencing Committee may impose restrictions and conditions upon the accepting of appointments or the conduct of insolvency work by the licenceholder until such time as the review and any appeal procedures are concluded. There is no right to apply for a review or appeal of such orders.
An application for a review or appeal will have the effect of staying the order of the Licensing Committee, unless the Licensing Committee specifically decides to impose restrictions.
If an application for a review or appeal is withdrawn, the order of the Licensing Committee or Review Committee (as appropriate) will be re-instated.
The serving of notice
|5.19A||A notice or any other document to be served under these regulations may be delivered by hand, or sent by fax or post, and
|5.19B||Any notice, certificate or other document required to be given, delivered or sent to the Institute shall be sent to Insolvency Licensing, ICAEW of Chartered Accountants in England and Wales, Metropolitan House, 321 Avebury Boulevard, Milton Keynes, MK9 2FZ.|
Variation of orders
|5.20||The Licencing Committee may, at any time, vary or revoke an order made by it under these regulations.|
The review of regulatory decisions
The following regulation explains how a licence holder or applicant can apply for a review of an order of the Licensing Committee.
|5.21||Within ten business days of the Licencing Committee serving an order on a licenceholder , insolvency affiliate or applicant, the licenceholder , insolvency affiliate or applicant may apply in writing to the Review Committee for a review of the order. This applies only to the following regulations:
A licence holder, insolvency affiliate or applicant who is dissatisfied with a decision listed in regulation 5.21 may apply for a review.
As stated under regulation 5.18, an order by the Review Committee will not take effect if an appeal is lodged under regulation 5.24. The Licensing Committee may, however, impose a restriction or condition on the licence holder's acceptance of appointments or the conduct of insolvency work until such time as the appeal process has concluded.
|5.22||A meeting of the Review Committee will be arranged as soon as is practicable after a licenceholder, insolvency affiliate or applicant has applied for a review under regulation 5.21. The Review Committee will consider the matter afresh and may consider new material put forward by the licenceholder or applicant or the Institute. The Review Committee may make any order which the Licencing Committee could have made.|
|5.23||The Review Committee in its absolute discretion may order a licenceholder , insolvency affiliate or applicant to pay some or all of the costs of the review.|
The Review Committee has the same powers as the Licensing Committee when making orders against a licence holder, insolvency affiliate or applicant. It can impose the same or different orders. It may also award costs against a licence holder, insolvency affiliate or applicant.
If a licence holder or applicant is dissatisfied with the decision of the Review Committee he can apply to the Appeal Committee.
|5.24||Within ten business days after the Review Committee has served an order on a licenceholder , applicant or insolvency affiliate under regulation 5.22 the licenceholder , applicant or insolvency affiliate may appeal to the Appeal Committee by writing to the Institute . An appeal cannot be made if it is only against the costs ordered by the Review Committee. An appeal can only be made on one or more of the following grounds:
|5.25||As soon as practicable after notice of appeal has been received under regulation 5.24, the Appeal Committee will consider the appeal and may:
|5.26||If the Appeal Committee sends a matter back to the same panel of the Review Committee or a differently constituted panel of the Review Committee under regulation 5.25, then regulation 5.22 will apply when the Review Committee reconsiders. The meeting of a panel of the Review Committee to reconsider the matter will be arranged as soon as practicable.|
The Appeal Committee may only consider an appeal on any of the grounds in regulation 5.24. On appeal, the decision of the Review Committee is stayed until the Appeal Committee considers the matter.
The Appeal Committee has the power to accept or reject the appeal, or vary the order. It may ask the Review Committee to reconsider the order.
The Appeal Committee can also award costs against a licence holder, insolvency affiliate or applicant.
An individual may be authorised by a Recognised Professional Body to be a licensed insolvency practitioner under the Act if that person, whether a member or not of that body, is bound by its regulations and guidance.
ICAEW is able to authorise members and insolvency affiliates of ICAEW. Under the Act, those who are granted insolvency affiliate status by ICAEW must be individuals. That status does not confer membership of ICAEW or entitle the individual to use the title "Chartered Accountant". However, it does mean that an insolvency affiliate is bound by the same rules and regulations as govern a full member of ICAEW.
Different requirements apply for affiliates and regulated non-members for investment business and audit purposes. Affiliate status in one regulated area does not give such status in another.
A key purpose of the Act is to make sure that only appropriately qualified persons are authorised as insolvency practitioners. Therefore, ICAEW, as a Recognised Professional Body, must have rules to make sure that its insolvency practitioners are fit and proper persons to act and that they meet acceptable requirements as to education, practical training and experience.
Persons who are granted insolvency affiliate status may also be issued with an insolvency licence as evidence of their authorisation subject to the requirements of Chapter 2.
Application for affiliate status
|6.1||Insolvency affiliate status does not give the insolvency affiliate any rights other than those contained in these regulations. Insolvency affiliates must not assert that they have any other rights.|
|6.2||An individual applying for insolvency affiliate status must do so in the manner that the Licencing Committee decides. To carry out its responsibilities under these regulations, the Licencing Committee may make any enquiries necessary to assess the eligibility of the applicant.|
|6.3||An applicant must satisfy the Licencing Committee that he:
|6.4||The Licencing Committee may:
Application forms may be obtained from ICAEW. The form will require sufficient information for the Licensing Committee to be satisfied that the applicant meets the standards required by ICAEW. This will include, for example:
The withdrawal of affiliate status
|6.5||The Licencing Committee will withdraw a person's insolvency affiliate status if, in its opinion, the insolvency affiliate:
If insolvency affiliate status is withdrawn under regulation 6.5 a person may apply for a review and an appeal of the decision. The process for applying for a review and appeal is set out in regulations 5.21 to 5.26. Insolvency affiliate status may also be withdrawn under the Disciplinary Bye-laws.
|6.6||In addition to the fee for authorisation , insolvency affiliate are required to pay an insolvency affiliate fee each year on 1 January. The Council or any committee to which it delegates this power will decide the amount of the fee.|
If an insolvency affiliate's application is unsuccessful, any fees charged will be refunded, less an amount reflecting the costs of administration. The fee payable for authorisation is required under regulation 2.10.
|6.7||The disciplinary procedures of the Institute will apply to insolvency affiliate in the same way as they apply to a member.|
ICAEW's Regulations, standards and guidance area includes details of the Bye-laws relating to disciplinary matters and the Code of Ethics.
|6.8||Applicants not ordinarily resident in the United Kingdom (overseas applicants) will be required to satisfy the Licencing Committee on an individual basis that their education, qualifications, professional status and insolvency experience are sufficient to meet the criteria in regulation 6.3.|
|6.9||When deciding whether an overseas applicant satisfies the requirements of regulation 6.3, the Licencing Committee will have regard to any guidance on the criteria to be applied.|
|Affiliate||cessation of authorisation||2.17|
|continuing responsibilities||2.20 - 2.23|
|overseas applicants||6.8 - 6.9|
|restrictions and conditions||5.5|
|review of regulatory decisions||5.21|
|withdrawal of status||6.5|
|Appeal||Committee, meaning of||1.8|
|Committee, previous disciplinary findings||4.9|
|Committee, procedures||4.14, 5.24 - 5.26|
|Committee, representation before||4.16|
|restrictions and conditions until procedure concluded||5.18|
|withdrawal of authorisation, effect on||5.17|
|Application||for affiliate status||6.1 - 6.4|
|for licence||2.4 - 2.5|
|for renewal of licence||2.6 - 2.8|
|Cessation of authorisation||automatic||2.17|
|request from licence holder for||2.18|
|validity of appointment||2.19|
|Conditions||on licence||2.8, 2.19, 4.3, 5.5, 5.16, 5.18, 5.21|
|Continuing Professional Development||3.1 - 3.4|
|Discipline||former licence holders||2.20|
|Disclosure of information||4.7 - 4.9|
|Dispensation||4.3, 5.1 - 5.3|
|Eligibility||for affiliate status||6.3|
|for a licence||2.1, 2.15|
|overseas applicants||2.2 - 2.3|
|Fees||costs of authorisation||2.9 - 2.12|
|non-payment of||2.13, 5.12, 6.5|
|Fit and proper||insolvency affiliate||6.3|
|licence holder||2.1, 2.7, 2.14, 3.4, 3.11, 4.8, 5.3|
|Implementation of orders||5.16 - 5.18|
|Insolvency experience||overseas insolvency affiliates||6.8|
|licence holder, eligibility of||2.1|
|overseas applicants, eligibility of||2.2|
|Insolvency Licensing Committee||composition||4.1 - 4.2|
|delegation||4.4 - 4.5|
|determining fit and proper status||4.8|
|disclosure of information||4.7|
|former licence holders||4.6|
|notification to committees||4.10 - 4.11|
|Insolvency Work||compliance with regulations||2.24|
|restrictions and conditions||5.5|
|Interpretation||1.5 - 1.7|
|Investigation Committee||meaning of||1.8|
|non-compliance with order of||2.17|
|notification to committees||4.11|
|Monitoring visit||application for insolvency licence||2.4|
|Licensing Committee, responsibilities||4.3|
|monitoring and enforcement||2.25 - 2.27|
|Notice||changes in circumstances||2.14-2.16|
|Overseas practitioners||eligibility for licence||2.2 - 2.3|
|insolvency affiliates||6.8 - 6.9|
|Practising Certificate||meaning of||1.8|
|Regulatory Penalties||5.6 - 5.11|
|Representation||before committees||4.15 - 4.16|
|Restrictions||on licence||2.5, 2.29,4.3, 5.5, 5.16, 5.21|
|Review Committee||costs of targeted visit||2.28|
|of Licensing Committee's decision||2.5|
|previous disciplinary finding||4.9|
|restrictions and conditions until procedure concluded||5.13 - 5.14|
|Scope and status||1.1 - 1.2|
|Service of notice||5.19A - 5.19B|
|Targeted visit||cost of||2.12, 2.28|
|Licensing Committee responsible for||4.2|
|review of cost of||5.21|
|Transitional arrangements||1.3 - 1.4|
|to Licensing Committee||4.3|
|Urgent Orders||5.14 - 5.15|
|Withdrawal of authorisation||by Licensing Committee||4.3, 4.5, 5.12 - 5.13|
|review of decision||5.18, 5.21|
|urgent order of||5.14 - 5.15|
1 Regulations 3.12 and 3.13 have an implementation date of 1 January 2005. Prior to that date, the previous regulations in force at the material time will apply.
2 Regulations 3.12 and 3.13 have an implementation date of 1 January 2005. Prior to that date, the previous regulations in force at the material time will apply.