Amendments to 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

By INSOL INDIA EDITORIAL TEAM Posted On : November 17, 2018

The IBBI has amended the (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 conditions in respect of ownership of an Insolvency Professional Agency (“IPA”). No person 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 IPA. However, certain entities, such as, a stock exchange, depository, banking company, insurance company, public financial institution and multilateral financial institution have been permitted to up to fifteen per cent of the paid-up equity share capital of an IPA. Further, the Central Government, a State Government and statutory regulator can hold up to one hundred percent of paid-up equity share capital of an IPA. The IPA, its promoters, its directors and its shareholders need to be fit and proper persons. 

 

The Insolvency and Bankruptcy Board of India (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) (Amendment) Regulations, 2018 has amended the structure and composition of governing body of IPA. The Governing Board of an IPA will now consist of managing director, independent directors and shareholder directors. The managing director shall not be considered either as an independent director or shareholder director. An individual may serve as an independent director for a maximum of two terms of three years each or part thereof, or up to the age of seventy years, whichever is earlier. Further, an IPA will, subject to guidelines issued by the IBBI from time to time, determine the qualification and experience, manner of appointment, terms and conditions of appointment and other procedural formalities associated with the selection and appointment of the managing director. The appointment, renewal of appointment and termination of service of the managing director shall be subject to prior approval of the IBBI. The managing director shall be an ex-officio member of Membership Committee, Monitoring Committee, Grievance Redressal Committee and Disciplinary Committee. 

 

Similar changes have been suggested to structure and composition of the governing body of an Information Utility, pursuant to the Insolvency and Bankruptcy Board of India (Information Utilities) (Second Amendment) Regulations, 2018. 

For more details please visit https://ibbi.gov.in/webadmin/pdf/press/2018/Oct/Press%20release%2011.10.2018.pdf