New Delhi: The Government on Wednesday amended the rules for insolvency professional and agencies, stating that now an insolvency professional shall not accept any assignment as interim resolution professional under the Insolvency and Bankruptcy Code unless he holds an ‘Authorisation for Assignment’ issued by his Insolvency Professional Agency.
The Government notified amendments in the Insolvency and Bankruptcy Board of India (Insolvency Professionals) (Amendment) Regulations, 2019, and the Insolvency and Bankruptcy Board of India (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) (Amendment) Regulations, 2019.
“An insolvency professional shall not accept or undertake any assignment as interim resolution professional, resolution professional, liquidator, bankruptcy trustee, authorised representative or in any other role under the Insolvency and bankruptcy Code, 2016 unless he holds an ‘Authorisation for Assignment’ issued by his Insolvency Professional Agency,” the Corporate Affairs Ministry said here.
This is effective from January 1, 2020, the Ministry said in a statement here.
According to the new amendments, an insolvency professional shall not engage in any employment when he holds an Authorisation for Assignment or when he is undertaking an assignment.
This would enable an individual to seek registration as an insolvency professional even when he is in employment. He must, however, discontinue employment when he wishes to have an Authorisation for Assignment. He may surrender Authorisation for Assignment when he wishes to take up employment.
The Ministry said where an insolvency professional has conducted a corporate insolvency resolution process, he and his relatives shall not accept any employment, other than an employment secured through open competitive recruitment, with, or render professional services, other than services under the Code to a creditor having more than ten per cent voting power, the successful resolution applicant, the corporate debtor or any of their related parties, until a period of one year has elapsed from the date of his cessation from such process.
An insolvency professional shall also not engage or appoint any of his relatives or related parties, for or in connection with any work relating to any of his assignment.
The government also made salient amendments in the agencies regulations. Now an Insolvency Professional Agency shall issue or renew an Authorisation for Assignment to insolvency professionals in accordance with its bye-laws.
