Insolvency technical update – March 2023
By Steven Wood, Practice Support Specialist (Insolvency)
4 April 2023
Insolvency technical update – your round-up of recent developments in insolvency
Revised Statement of Insolvency Practice (SIP) 3.1 – Individual Voluntary Arrangements
A reminder that revised SIP 3.1 relating to Individual Voluntary Arrangements (IVAs) applies to IVAs where the nominee is appointed on or after 1 March 2023.
United Kingdom Financial Intelligence Unit (UKFIU) guidance
The UKFIU has published an updated guide ‘Requesting a defence from the NCA under POCA and TACT’.
The guidance is intended to inform reporters of Suspicious Activity Reports (SARs) of the approach when reporters, through submitting a SAR, seek a defence (or ‘consent’) from the National Crime Agency (NCA) to a principal money laundering offence and/or a terrorist financing offence.
The Economic Crime (Anti-Money Laundering) Levy (Amendment) Regulations 2023 (‘the 2023 regulations’)
The 2023 regulations came into force on 28 March 2023.
The regulations amend the Economic Crime (Anti-Money Laundering) Levy Regulations 2022 to make further provisions relating to the Economic Crime (Anti-Money Laundering) levy (‘the levy’).
The 2023 regulations clarify that, for the purposes of the insolvency of a regulated entity, any amount of levy that relates to revenue attributable to a period on or after the date of the insolvency procedure (i.e. in a trading-on scenario) is to be regarded as an expense of the procedure.
As a reminder, the levy will first be charged in the financial year running from 1 April 2022 to 31 March 2023 on any medium, large and very large entities regulated for anti-money laundering (AML) purposes, including insolvency practitioners, at any point during that year.
Discrepancy reporting
Regulation 9 of the Money Laundering and Terrorist Financing (Amendment) (No.2) Regulations 2022 becomes effective on 1 April 2023.
This amends regulation 30A(1) of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (‘the MLRs’) to extend the scope of the discrepancy reporting regime so that it’s an ongoing requirement and limiting the requirement to report only ‘material discrepancies’.
Regulation 30A of the MLRs requires relevant persons to report to the Registrar of Companies any discrepancies between the information they hold about the beneficial owners of companies, as a result of CDD measures, and the information recorded by Companies House on the public companies register. The requirement applies at the onboarding stage, “before establishing a business relationship” therefore the amendment aims to enhance the accuracy and integrity of the register by making the obligation ongoing.
The Employment Rights (Increase of Limits) Order 2023
The above Order comes into force on 6 April 2023.
For individuals made redundant on or after 6 April 2023, their weekly pay will be capped at £643, and the maximum statutory redundancy pay they can receive is £19,290.
Common Financial Statement ('CFS') Update of trigger figures
The CFS trigger figures have been updated from 1 April 2023. The Accountant in Bankruptcy has advised that it will adopt a flexible approach for a period of one month after 1 April 2023 as a transitional arrangement for advisers updating their systems and processes.
The Insolvency (Amendment) Rules (Northern Ireland) 2023
The above Rules came into operation on 13 March 2023.
The Rules amend the Insolvency Rules (Northern Ireland) 1991 to provide permanent procedural rules for the company moratorium procedure introduced into the Insolvency (Northern Ireland) Order 1989 by the Corporate Insolvency and Governance Act 2020.
Companies House update
The Companies Act 2006 requires a company to submit a copy of a resolution to the Registrar in order to comply with several different filing obligations. It has previously been the Registrar’s practice to accept a set of minutes that contains details of the resolution.
From 13 March 2023 the Registrar will no longer accept a set of minutes which have a resolution embedded within them. A company will need to file a separate copy of the resolution in order to comply with its filing requirements. The Registrar will regard sets of minutes that are submitted from 13 March 2023 to be unnecessary material which is not easily separable and so the Registrar will reject such documents.
Companies House Direct and WebCHeck
It has been confirmed that the Companies House Direct (CHD) and WebCHeck services are closing on 30 November 2023.
Users should use the ‘Find and update company information’ service instead.
Legal update
Re Sova Capital Limited (in special administration) [2023] EWHC 452 (Ch): The English High Court’s judgment is the first reported decision on an unsecured credit bid for the assets of a company in administration. The court approved the sale of assets to an unsecured creditor with the consideration being that creditor’s waiver of unsecured claims against the company in administration. The court concluded that the transaction is properly characterised as a sale or other disposal rather than a distribution and did not infringe (or engage) the ‘pari passu’ principle.