IBBI Amends Insolvency Professional Regulations W.E.F. 18th September 2023

The Insolvency and Bankruptcy Board of India (“IBBI”) vide its notification dated 18.09.2023, has notified amendments to the Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016 (“IP Regulations”). The amendments are effective from 18.09.2023. Thereafter, on 20.09.2023 the IBBI issued a Press Release, summarizing the amendments. The key amendments are as under: Introduction of a unified enrolment and registration application form to enable submission of common application form for both enrolment and registration processes.The Regulation 5 provides eligibility criteria for individuals for their registration as Insolvency Professional. Now a time limit of 12 months (calculated from the date of payment of application fee) has been imposed on candidates to complete the pre-registration educational course from an Insolvency Professional after his enrollment as a professional member. Regulation 6(1) and 6(1A) have been amended to enable an individual to submit application to the IBBI through Insolvency Professional Agency (IPA) of which he/she is a member. The amended provisions are: “6(1) An individual enrolled with an insolvency professional agency as a professional member may make an application to the Board through the insolvency professional agency of which he is a member, in Part – II of Form A of the Second Schedule to these Regulations, along with a nonrefundable application fee of twenty thousand rupees to the Board.” “6(1A) An insolvency professional entity eligible for registration as an insolvency professional under sub-regulation (2) of regulation 4 may make an application to the Board through the insolvency professional agency of which it is a member, in Part – II of Form AA of Second Schedule to these Regulations, along with a non-refundable application fee of two lakh rupees to the Board.” Regulation 10(1) has been amended to add the following additional instances where the IPA is required to inform the Board: “(e) accepts the application for surrender of membership and strikes the name of the professional member from its registers; (f) expels the professional member; or (g) receives intimation of demise of an individual or winding up or dissolution of a company, limited liability partnership or registered partnership firm and strikes the name of the professional member from its registers.” A new Regulation 10A has been inserted which provides for the manner in which an Insolvency Professional can surrender its certificate of Registration “10A. Surrender of certificate of registration. (1) An insolvency professional may surrender its certificate of registration by making a request to the Board, in writing along with the certificate of registration in original. (2) If the Board is satisfied, it may accept the request for surrender of certificate of registration within thirty days of its receipt and upon acceptance, the registration of such insolvency professional shall stand cancelled. (3) On and from the date of cancellation of certificate of registration, the concerned person shall not represent itself to be a holder of the certificate for carrying out the activity for which such certificate had been granted.” Another new Regulation 10B has been inserted which provides for special procedure for action on surrender or expulsion: “10B. Special procedure for action on surrender, expulsion, etc. (1) While disposing of the matter under this regulation, the Board shall not be bound by the procedure specified in regulation 11. (2) On receipt of information under clause (e) and (f) of sub-regulation (1) of regulation 10, the Board may issue a notice, if required, to such professional member, calling upon it to explain as to why the certificate of registration, granted under the regulations, should not be cancelled. (3) The professional member may make written submission(s), if any, within a period not exceeding twenty-one days from the date of service of notice. (4) On being satisfied with the submission(s) made under sub-regulation (3), the Board may decide to cancel the registration or issue directions to complete the ongoing assignments, make pending compliances including payment of fee, etc. (5) The Board shall communicate its decision under sub-regulation (4) within thirty days from date of receipt of written submissions under sub-regulation (3). (6) On receipt of information under clause (g) of sub-regulation (1) of regulation 10, the registration of such insolvency professional with the Board shall be deemed to have been cancelled from the date of demise or winding up or dissolution, as the case may be. (7) On and from the date of cancellation of the certificate of registration, under this regulation, the legal heirs or assignee of the insolvency professional shall take steps for delivery of any record(s)...

IBBI Amends Insolvency Professional Regulations W.E.F. 18th September 2023

Pallavi Mishra

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