IBC Updates

IBC Updates – October 2018

 

22nd October, 2018 – Insolvency Law Committee submits its 2nd Report on Cross Border Insolvency Recommends adoption of the UNCITRAL Model Law of Cross Border Insolvency, 1997

The Insolvency Law Committee (ILC) constituted by the Ministry of Corporate Affairs to recommend amendments to Insolvency and Bankruptcy Code of India, 2016, has submitted its 2nd Report to the Government, which deals with cross border insolvency. The ILC has recommended the adoption of the UNCITRAL Model Law of Cross Border Insolvency, 1997, as it provides for a comprehensive framework to deal with cross border insolvency issues. The UNCITRAL model law, adopted by 44 countries, will provide greater confidence to foreign investors while giving precedence to domestic laws.

 

22nd October, 2018 – IBBI notifies the Insolvency and Bankruptcy Board of India (Mechanism for Issuing Regulations) Regulations, 2018

Given the importance of subordinate legislations for the various processes under the Code, it is essential that the IBBI has a structured, robust mechanism, which includes effective engagement with the stakeholders, for making regulations. In sync with this philosophy and the statutory requirement, the IBBI notified the Insolvency and Bankruptcy Board of India (Mechanism for Issuing Regulations) Regulations, 2018 (Issuing Regulations) to govern the process of making regulations and consulting with the public.

 

11th October, 2018 – IBBI amends the Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016

The Insolvency and Bankruptcy Board of India (Board) has notified the Insolvency and Bankruptcy Board of India (Insolvency Professionals) (Second Amendment) Regulations, 2018. The salient amendments were that an insolvency professional shall pay to the Board, a fee calculated at the rate of 0.25 percent of the professional fee earned for the services rendered by him as an insolvency professional in the preceding financial year, on or before the 30th of April every year. The amendment also provides that a delay in payment of fee by an insolvency professional or an insolvency professional entity will attract a simple interest at the rate of 12 percent per annum on the amount of fee unpaid, without prejudice to any other action which the Board may take as deemed fit under the Code or any regulations made there under.

 

11th October, 2018 – IBBI amends (a) the Insolvency and Bankruptcy Board of India (Insolvency Professional Agencies) Regulations, 2016, (b) the Insolvency and Bankruptcy Board of India (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) Regulations, 2016, and (c) the Insolvency and Bankruptcy Board of India (Information Utilities) Regulations, 2017

The Insolvency and Bankruptcy Board of India (Insolvency Professional Agencies) (Amendment) Regulations, 2018 provide that no person shall at any time, directly or indirectly, either individually or together with persons acting in concert, acquire or hold more than five per cent of the paid-up equity share capital in an insolvency professional agency (IPA). The Insolvency and Bankruptcy Board of India (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) (Amendment) Regulations, 2018 provide for composition of the Governing Board of an IPA and its managing director. The Insolvency and Bankruptcy Board of India (Information Utilities) (Second Amendment) Regulations, 2018 have made similar provisions, as narrated in Insolvency and Bankruptcy Board of India (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) (Amendment) Regulations, 2018, in respect of an information utility (IU).

 

5th October, 2018 – IBBI amends the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016

The Regulations earlier required the resolution professional to circulate the minutes of the meeting by electronic means to all members of the committee of creditors within forty-eight hours of the conclusion of the meeting and to seek a vote of the members who did not vote at the meeting. The amendment now requires the resolution professional to circulate the minutes of the meeting by electronic means to authorized representative(s) also. The Regulations will enable a financial creditor in a class, who could not vote on a matter before the meeting, to vote after minutes of the meeting are circulated.

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