Eligibility for insolvency authorisation
Introduction
The Insolvency Regulations set out the eligibility requirements for individuals who wish to be authorised by ICAS to act as an Insolvency Practitioner in the UK. Regulation 3.2 requires that an Applicant must:
- a) Be an ICAS Member or an ICAS Affiliate
- b) Hold a Practising Certificate if an ICAS Member or a member of a professional body which issues an equivalent authorisation
- c) Be a fit and proper person
- d) Satisfy any knowledge, skills and experience requirements as may be set out by the Committee or BIS
- e) Have undertaken, and will continue to undertake, adequate and relevant CPD
- f) Have adequate professional indemnity insurance cover
- g) Be able to demonstrate compliance with the all relevant insolvency legislation, SIPs, ICAS’ Rules and Regulations, as well as other applicable standards
- h) Provide the Committee with all information requested in connection with the application
Regulation 3.9 states that the Committee may waive or vary the requirements of the Regulation 3.2 in certain limited circumstances. In general terms, a waiver will only be granted if an individual can demonstrate that the requirements are “unnecessarily burdensome” and the Committee is satisfied that waiving or varying would not present undue risks to third parties.
In accordance with Regulation 3.2 (d), this document sets out the knowledge, skills and experience requirements which the Committee will expect an individual to be able to satisfy in order to be eligible for authorisation by ICAS as an Insolvency Practitioner.
Individuals may apply to be fully authorised or partially authorised in respect of individuals only or in respect of companies only. Non-appointment taking authorisations may also be applied for.
1. Member or affiliate status
- 1.1 An individual who is not an ICAS Member will need to become an ICAS Affiliate in order to be authorised by ICAS as an Insolvency Practitioner.
- 1.2 Applications to become an Affiliate are determined in accordance with the Admission Regulations. Where appropriate the application for insolvency authorisation incorporates an application to become an Affiliate.
2. Practising certificates
- 2.1 An ICAS Member who wishes to be able to accept appointments as an Insolvency Practitioner, will need to hold a current practising certificate. Further information on practising certificates is available here.
- 2.2 An individual who is a member of a different professional body will need to comply with the body’s requirements for practising certificates (or equivalent authorisations). If the body requires its practising members to hold a practising certificate, ICAS will expect the individual to hold the authorisation (and to be able to provide evidence to ICAS on request).
- 2.3 The requirement to hold a practising certificate (or equivalent authorisation) will be waived by ICAS if the individual wishes to be authorised on a non-appointment taking basis and a practicing certificate (or equivalent authorisation) is not otherwise required.
3. Fit and proper
- 3.1 The individual’s compliance with ICAS’ Code of Ethics (or with the ethical code of the relevant professional body);
- 3.1.1 Any criminal convictions; particularly those involving fraud or dishonesty;
- 3.1.2 Any evidence that the individual has engaged in business practices which appear to be deceitful or otherwise unfair or improper, whether unlawful or not;
- 3.1.3 The adequacy of the systems of control in place at the individual’s practice, including records, client money accounts and anti-money laundering procedures;
- 3.1.4 Whether the individual is likely to undertake insolvency work with independence and integrity and whether the practice in which the individual operates is likely to promote and protect such principles;
- 3.2 If an individual is currently authorised by ICAS as an Insolvency Practitioner, in addition to the factors set out above, ICAS will also take into account the following when making a fit and proper assessment:
- 3.2.1 The extent to which the Insolvency Practitioner has complied with any conditions or directions previously applied by ICAS, and the extent to which such conditions or directions are still required;
- 3.2.2 Any failures to act in accordance with the relevant insolvency legislation, SIPs, ICAS’ Rules and Regulations, as well as other applicable standards;
- 3.2.3 The quality of work undertaken by the Insolvency Practitioner, as demonstrated to ICAS through Insolvency Monitoring reports, complaints, or such other sources;
- 3.2.4 Any disciplinary or other regulatory findings or sanctions applied to the Insolvency Practitioner.
- 3.3 If an individual is currently (or was previously) authorised as an Insolvency Practitioner by a body other than ICAS, ICAS will look to obtain the information set out in 3.2 above from the relevant body.
- 3. 4 The lists of factors set out in sections 3.1 and 3.2 are not exhaustive, with ICAS taking into account any information it considers relevant in making this assessment, from such sources as it considers appropriate. Disclosure of convictions required under 3.1.2shall be those which are unspent in accordance with the Rehabilitation of Offenders Act 1974
4. Knowledge, skills and experience requirements
- 4.1 In order to be eligible to be authorised as an Insolvency Practitioner, a new applicant will need to be able to demonstrate one of the following to ICAS’ satisfaction:
- 4.1.1 A pass in the examination of the Joint Insolvency Examination Board
- previous authorisation as an Insolvency Practitioner by ICAS or another authorising body within the previous five years
- 4.1.2 A professional or vocational qualification awarded in a country outside the UK which is equivalent to the examination of the Joint Insolvency Examination Board in terms of its knowledge and skills requirements.
- 4.2 The requirement to demonstrate a pass in the examination of the Joint Insolvency Exam Board will vary depending on the level of authorisation which an individual is seeking from ICAS. The requirements are set out as follows:
Authorisation Requirement Full authorisation Pass in all papers Partial authorisation – personal insolvency Pass in the personal insolvency exam Partial authorisation – company insolvency Pass in the liquidation and ACVAR exams
- 4.3 When assessing an individual’s experience, ICAS will take into accountinsolvency experience obtained in the following categories:
Category A Category B Category C involvement in insolvency work of a type reserved to Insolvency Practitioners under the Insolvency Act including holding insolvency appointments involvement in other insolvency work not reserved to Insolvency Practitioners under the Insolvency Act (including advisory work) other work done which might lead to formal insolvency or the avoidance thereof For example: - work in relation to insolvency proceedings as an office holder;
- work in relation to insolvency proceedings where the work involves the supervision or management of the conduct of those appointments on behalf of the office holder;
- work in relation to the administration of insolvency proceedings
For example: - the giving of insolvency advice generally;
- work as an advising member in the period immediately prior to commencement of a creditors' voluntary liquidation;
- work in relation to receiverships other than administrative receiverships or Scottish receiverships;
- work in relation to insolvency procedures under other legal jurisdictions
- work of a regulatory nature, such as investigating complaints about the conduct of insolvency practitioners or the conduct of directors of insolvent companies, insolvency monitoring, practice review and compliance work relating to insolvency practice or regulation.
For example: - work undertaken for banks, other lenders or creditors, such as viability reviews, monitoring of solvency, etc.
- work involved with the turnaround of companies' and/or other company rescue work.
When demonstrating such experience to ICAS, the individual must ensure that the information is restricted to their own hours only, excluding any time spent by other persons on the work in question.
- 4.4 An individual who is applying to be authorised as an Insolvency Practitioner for the first time (including authorisation on a non-appointment taking basis) will need to be ableto demonstrate a minimum of 450 chargeable hours in relation to Category A, B and C work in the three years prior to initial application, with a minimum of 100 hours in each year. In exceptional circumstances experience in accordance with the following table shall also be considered acceptable:
Period (Years) Total Hours Minimum Annual Hours 5 750 100 8 or more 1,000 100
- 4.5 An individual applying for partial authorisation will need to be able to demonstrate that the hours of experience set out in the table above were obtained substantially in respect of either personal or corporate work, as appropriate to the area in which authorisation is being sought.
- 4.6 An individual who is already authorised by ICAS as an insolvency practitioner must maintain adequate involvement in insolvency work and must be able to demonstrate such work to ICAS on request.
- 4. 7 At the point of application, and at all times thereafter, individuals will be expected to demonstrate to ICAS that they have undertaken adequate Continued Professional Development, in accordance with ICAS’ Regulations
5. Other requirements
- 5.1 In order to be authorised by ICAS as an Insolvency Practitioner, an individual will need to be able to demonstrate to ICAS’ satisfaction that adequate professional indemnity insurance is in place in respect of all insolvency work to be undertaken, in compliance with ICAS’ Regulations.
- 5.2 All individuals will be expected to provide the following undertakings to ICAS in advance of being authorised:
- 5.2.1 An undertaking to comply with all relevant insolvency legislation, SIPs, ICAS’ Rules and Regulations, as well as other applicable standards;
- 5.2.2 An undertaking to take all reasonable steps to ensure that all members of staff under the individual’s direction will comply with all relevant insolvency legislation, SIPs, ICAS’ Rules and Regulations, as well as other applicable standards;
- 5.2.3 An undertaking to promptly report to ICAS any matters which might reasonably be considered to negatively impact upon the individual’s eligibility as an Insolvency Practitioner (e.g. fit and proper factors, including criminal convictions, personal insolvency, or other matters affecting the individual’s ability to undertake insolvency work);
- 5.2.4 An undertaking to make funds available to cover the costs associated with the transfer of open insolvency cases to another Insolvency Practitioner, in the event of authorisation being surrendered, withdrawn or otherwise terminated.
- 5.3 If an individual is currently (or was previously) authorised as an Insolvency Practitioner by a body other than ICAS, the individual must grant to ICAS such undertakings as it considers relevant, including undertakings that the individual will:
- 5.3.1 Secure the assignation or equivalent process of bonds in favour of ICAS:
- 5.3.2 Comply with all legislative bonding requirements and make all relevant lodgements with and returns to ICAS.