Views sought on revised SIP 13
A revised Statement of Insolvency Practice 13 – acquisition of assets by connected parties in an insolvency process has been issued by JIC for consultation. Find out what changes are proposed and how to give your views.
The acquisition of business assets by connected parties often draws suspicion from creditors and therefore increased transparency around such transactions is required.
The Joint Insolvency Committee (JIC) is consulting on a revised version of Statement of Insolvency Practice 13 - acquisition of assets by connected parties in an insolvency process. The draft SIP has been developed by a JIC working group comprising members of the profession (from firms of different sizes) and creditor representatives.
The current SIP 13 (acquisition of assets of insolvent companies by directors) dates back to 1997, so the revised version of the SIP looks quite different from that which is currently in force.
The main change is that the new draft acknowledges that creditors and other interested parties want to know about transactions with connected parties generally and not just those involving directors. It’s proposed therefore that the revised SIP will apply to all connected party transactions in personal and corporate insolvency. The consultation seeks views on this approach.
In revising SIP 13 the working group took the following approach:
- drafting the SIP requirements in a proportionate way and without being onerous, recognising that it may apply to low value transactions;
- focusing on a narrative explanation of the transaction rather than prescribing the information which should be disclosed;
- adopting the principles and key compliance standards format used for all new SIPs;
- removing all legislative references with the exception of the definition of connected party;
- using, wherever possible, language which is consistent with Statement of Insolvency Practice 16.
It is intended that this SIP will apply UK wide
The consultation closes on 11 May 2016
Download: Consultation questionnaire PDF [93 KB]