The Insolvency and Bankruptcy Board of India (IBBI) on February 01, 2024, issued a circular regarding the Measures for rationalisation of the regulatory framework of Insolvency Professional Entities.
Based on the feedback received from stakeholders and experiences encountered during implementation, it is considered imperative to provide clarity on a few areas to facilitate IPEs to undertake their expanded role.
These issues and clarification thereupon have been elaborated as follows:
• Clarification in relation to disciplinary proceedings in the case of an IP which is an IPE
It is hereby clarified that in case the assignment is undertaken by the IP, which is an IPE, the show-cause notice under regulation 11 of the IBBI (Inspection and Investigation) Regulations, 2017 shall be issued to:
(a) its partner or director, as the case may be, who is an IP and was authorised to sign and act on behalf of it for the respective assignment; and/or
(b) the IPE if in the opinion of the Board, there are either repeated instances of contravention against one or more partners or directors of the IPE or instances of systemic failure on the part of such IPE.
• Clarification on applicability of limit on number of Assignments to an IP which is an IPE
It is hereby clarified that clause 22 of Code of Conduct specified in First Schedule to IP Regulations does not apply to an IP which is an IPE.
• Clarification on applicability of fee structure to an IP which is an IPE
It is hereby clarified that regulation 34B of CIRP Regulations does not apply to an IP, which is an IPE.
[Circular No. IBBI/IPE/64/2024]
