Rescind IBBI circulars due to the provisions already provided in regulation- IBBI Circular No. IBBI/IP/55/2022 dated 09.11.2022

Insolvency and Bankruptcy Board of India
7th Floor, Mayur Bhawan, Connaught Place, New Delhi – 110001


No. IBBI/IP/55/2022

9th November, 2022

All Registered Insolvency Professionals
All Recognised Insolvency Professional Entities
All Registered Insolvency Professional Agencies
The Registered Information Utility
(By mail to registered email addresses and on website of the IBBI) Dear Sir/ Madam,

Subject: Review of Regulations

The Board had issued few circulars, from time to time, in exercise of powers under section 196 of the Insolvency and Bankruptcy Code, 2016 in order to facilitate Insolvency Professionals to carry out processes under the Code.

2. The Board conducted an exercise of review of regulations, circulars based on experience gained. It is observed that certain circulars are no longer required on account of being already provided in the Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016 [IP Regulation] or the Insolvency and Bankruptcy Board of India (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) Regulations, 2016 [Model Bye-Laws Regulations] or the Insolvency and Bankruptcy Board of India (Information Utilities) Regulations, 2017 [IU Regulations], as the case may be.

3. Accordingly, it has been decided to rescind circulars listed in the Annexure, with immediate effect.

4. You are advised to take note of the above and follow the provisions of relevant Regulations.

5. The circular is issued with the approval of competent authority.

Yours sincerely,
(Dilip Arjun Khandale)
Deputy General Manager
Tel: 011-23462870

-// Annexure //-

Sl. No. Date of Issue And Circular No. Subject Brief of Circular Incorporation
1 No. IP/001/2018 Dated January 3, 2018 Use  of Registration Number etc. An  IP  is  required  to prominently state in all his communications,  whether by  way  of  public announcement or otherwise to a stakeholder or to an authority,  his  name, address, email, Registration Number etc. Clause 15A of ‘Code of Conduct’  specified  in First  Schedule  to  IP Regulations.
2 No. IP/002/2018 Dated January 3, 2018 IP  to  ensure compliance with provisions of the applicable laws. IPs  were  directed  to exercise reasonable care and diligence  and  take  all necessary steps to ensure that the corporate person undergoing  any  process under the Code complies with the applicable laws.

It was further clarified that any loss, including penalty, if any,  because of non-compliance  of applicable laws, shall not form part of IRPC or liquidation process cost under the Code.

Further,  IP  will  be responsible  for  the  non-compliance  of applicable laws if it is because of his conduct.
Clauses 27A and 27B of ‘Code  of  Conduct’ specified  in  First Schedule  to  IP Regulations.
3 No. IP/003/2018 Dated January 3, 2018 IP  not  to outsource  his responsibilities. It was directed that an IP shall not outsource any of his  duties  and responsibilities  under  the Code. Already covered under regulation 7 (2) (bb) of IP Regulations.
4 No. IP/004/2018 Dated January 16, 2018 Fees payable to IP and to other professionals appointed by the IP The IBBI clarified that an IP shall render services for a fee which is a reasonable reflection of his work, raise bills / invoices in his name towards such fees, and such fees shall be paid to his bank account.

Any payment of fees for the services of an IP to any person, other than the IP, shall not form part of the IRPC.

Similarly,  any  other professional  (such  as registered valuer) appointed by an IP shall raise bills / invoices in his / its name towards such fees, and such fees shall be paid to his / its bank account.
Part  of the  provisions were  already  covered under clauses 25, 25A, 26 and 27 of the ‘Code of Conduct’  specified  in First  Schedule  to  IP Regulations.

Clause 25B, 25C and 26A of the ‘Code of Conduct’ specified  in  First Schedule  to  IP Regulations  has  been inserted.
5 No.  IP/005/2018
Dated January 16, 2018
Disclosures  by IPs and  other Professionals appointed  by IPs conducting Resolution Processes It was directed that an IP and every other professional appointed by the IP for a resolution  process  shall make certain disclosures to the IPA of which he is a member within a stipulated timeframe.

The IPA was required to facilitate  receipt  of  the disclosures and disseminate such disclosures on  its website within stipulated timeframe.
Part  of the  provisions already  covered  under Regulation 40B of IBBI (Insolvency  Resolution Process  for  Corporate Persons)  Regulations, 2016 [CIRP Regulations].

Clauses 8A, 8B, 8C and 8D  of the  ‘Code  of Conduct’  specified  in First  Schedule  to  IP Regulations  have  been inserted.

Clause 6 (3) in Schedule to the Model Bye Laws Regulations  have  been inserted.
6 No. IP(CIRP)/007/2018 Dated February 23, 2018 Confidentiality of  information relating  to processes under the Code It was directed that an IP, whether acting as IRP, RP or Liquidator, except to the extent provided in the Code and Rules, Regulations or Circulars issued thereunder,

(i) shall  keep  every information related to the processes confidential; and

(ii) shall  not  disclose  or provide access to any such information  to  any unauthorised person.
Already covered in clause 21 of ‘Code of Conduct’ specified  in  First Schedule  to  IP Regulations.
7 No. IBBI/IP/021/2019 Dated May 2, 2019 Surrender  of Membership It was advised that an IPA shall not ordinarily accept temporary surrender  of professional membership, where the IP is conducting a process under the  Code. Certain  forms  were stipulated. Already covered in IP Regulations and Model Bye-Laws Regulations.

With  introduction  of Authorisation  for Assignment, the issue of temporary surrender has become redundant. In this regard,  the  Board has issued  clarification no. IBBI/IP/2022 dated April 11, 2022
8 IPA/009/2018
Dated  April  19, 2018
Annual Compliance Certificate  for Insolvency Professional Agencies Stipulations  regarding annual  compliance certificate to be submitted by IPAs to  IBBI were issued. Upon rescission of the circular, revised circular containing the format of annual  compliance certificate aligning with latest Regulations, issued vide  reference  no. IBBI/IPA/54/2022 on 2nd November, 2022 under Regulation 7(3) of Model Bye-Laws amended.
9 No. IBBI/IPA/43/2021 Dated  July  28, 2021 Monetary Penalties to be imposed by an Insolvency Professional Agency It issued directions upon IPAs to amend their Bye- laws  to provide  for the maximum and minimum monetary  penalty,  in stipulated circumstances. Clause 24(2)(d) of the schedule to the Model Bye-Laws  Regulations has been amended.
10 No:  LA/010/2018 Dated  April  23, 2018 Commencement of Disciplinary Proceeding It was clarified that (i) a disciplinary proceeding is considered  as  pending against an IP from the time he has been issued a show cause notice by IBBI till its disposal by the disciplinary committee; and (ii) an IP who has been issued a show cause notice shall not accept any fresh  assignment as IRP, RP, liquidator, or a bankruptcy trustee under the Code. Already  provided  in clause  23A  of  the schedule stipulated in the Model  Bye-Laws Regulations.

Explanation  has  been inserted  to  aforesaid clause.
11 No. IBBI/IU/025/2019 Dated September 7, 2019 Statutory Repositories under regulation 21(2)(c)(ii) of the Insolvency and Bankruptcy Board of India (Information Utilities) Regulations, 2017 The MCA 21 database of the Ministry of Corporate Affairs  and  the  Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI) registry were approved as repositories for the purposes of regulation 21(2)(c)(ii) of IU Regulations. Regulation 21(2)(c)(ii) of IU Regulations has been amended to include the provisions of the circular.


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