IPAs should now have a compliance officer; publish self-evaluation report
The insolvency regulator – Insolvency and Bankruptcy Board of India (IBBI) — now requires the insolvency professional agencies (IPAs) to appoint a compliance officer, who would be responsible for ensuring compliance with the provisions of the Insolvency and Bankruptcy Code (IBC) and regulations, circulars, guidelines and directions issued.
In a circular issued on 14 January 2021, the IBBI made a few amendments the Insolvency and Bankruptcy Board of India (Model Bye- Laws and Governing Board of Insolvency Professional Agencies) Regulations, 2016.
The requirement for an IPAs having a compliance officer is one of the few amendments. The regulations require the compliance officer to immediately and independently, report to the regulator any noncompliance of the provisions referred to in sub-regulation.
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S/he should also submit a compliance certificate to the Board annually, verifying that the insolvency professional agency has complied with the necessary provisions. The said annual compliance certificate should be signed by the managing director of the insolvency professional agency.
The new regulations now require the governing Board of the IPA to appoint or remove the compliance officer only by means of a resolution passed in its meeting.
The regulations further require the IPA to publish a report on self-evaluation on its website. The governing board of the IPA should also evaluate its performance in a financial year within three months of the closure of the year.
