The Joint Insolvency Committee (JIC) is consulting on changes to SIP 3.2 – Company voluntary arrangements, SIP 3.1 – Individual voluntary arrangements, SIP 9 – Payments to insolvency office holders and their associates and SIP 7 – Presentation of financial information in insolvency proceedings.
The consultation will commence on 27 April 2020 and will be open for a period of 12 weeks, closing on 20 July 2020.
The JIC recognises that these are testing times. But these are only proposed changes. There is no intention to amend the Statements of Insolvency Practice (SIPs) without careful consideration of the responses received and any plan to introduce changes will take into account any continuing challenges faced by the insolvency profession.
The legislative changes recently announced by Government, do not have impact on the SIPs which are the subject of this consultation.
SIP 3.2 – company voluntary arrangements and SIP 3.1 – individual voluntary arrangements
A working group of the JIC has been reviewing Statement of Insolvency Practice 3.2 – Company Voluntary Arrangements. The working group was comprised of insolvency professionals and other participants in the company voluntary arrangement (CVA) process, including the British Property Federation and HMRC.
The JIC decided to review the SIP because of the raised profile of the CVA particularly in the retail sector, the outcome of the government’s review of the corporate insolvency framework and its focus on company rescue, and the academic research into CVAs carried out by Professor Peter Walton. Professor Walton presented to the working group on his findings.
The principal changes made to SIP 3.2 relate to transparency and the provision of information. In particular, additions have been made to the section of the SIP which deals with the proposal. Other changes include an emphasis on the need for the nominee to be objective.
After completing its review of SIP 3.2, the working group identified potential changes which would also be relevant to Statement of Insolvency Practice 3.1 – Individual Voluntary Arrangements and Statement of Insolvency Practice 3.3 – Trust Deeds. No detailed review of SIP 3.1 and 3.3 was carried out, the relevant changes from SIP 3.2 were simply carried over into SIP 3.1 and 3.3. The JIC is also seeking your views on the proposed changes to SIP 3.1 and there is an opportunity in the consultation questionnaire to suggest other changes to SIP 3.1. SIP 3.3 is not included in this consultation as the recent inquiry into Protected Trust Deeds by the Scottish Government may recommend changes to the law, which could require changes to the SIP or recommend changes to the SIP directly.
The consultation seeks your views on the changes made by the working group. SIP 3.2 applies in England and Wales, Scotland and Northern Ireland, SIP 3.1 applies in England and Wales and Northern Ireland.
All the changes proposed to the SIPs are in the context of the current legislative framework. SIPs cannot be used as a means of amending the law.
Download the form to submit your consultation response
The form can be completed electronically and returned by email. If you would prefer to provide your comments in a different way, please send them to jic_sip_consultation@icaew.com