The Recognised Professional Bodies (RPBs) have issued guidance regarding insolvency practitioners (IPs) who enter into Joint Nominee agreements within individual voluntary arrangements (IVAs). This guidance is in addition to the IP’s statutory and ethical obligations.
A joint nominee agreement does not dilute nor remove the ethical or legal duties of IPs. IPs are still required to abide by the Insolvency Code of Ethics which requires IPs to comply with relevant laws and legislation. For joint nominee agreements this would include the Insolvency Act 1986 and the Statements of Insolvency Practice (SIPs), particularly SIP 3.1.
Scope
The guidance applies to the following:
- Insolvency Practitioners who enter into joint nominee arrangements;
- Referring Insolvency Practitioners – those identifying and introducing individuals who may be suitable for an IVA; and
- Receiving Insolvency Practitioners – those assuming responsibility as nominee and subsequently as supervisor.
Key areas covered
- Compliance – poor practice or non-compliance with the fundamental principles of the Insolvency Code of Ethics cannot be justified by either the involvement of another IP or the IPs own employment status. (Paragraph 4 of the guidance)
- Role of the referring IP – debtors should be given a clear explanation of the role of all parties to avoid confusion. (Paragraph 7 of the guidance)
- Role of the receiving IP – must have clear procedures to review all available information (documentation, call recordings and proposals). (Paragraphs 15-16)
- Reporting requirements – failings or non-compliance under SIP 1 must be reported to the relevant RPB. (Paragraph 5)
- Debt packager ban and disguising payments for leads – using joint nominee agreements to attempt to disguise lead payments or circumvent the FCA’s ban on debt packager remuneration will attract particular scrutiny from the RPBs. (Paragraphs 23, 28, 31 and 34)
- Accountability and corrections – IPs subject to the joint nominee agreement must all sign the nominee’s report, take corrective action for any errors and terminate agreements that do not maintain standards. Actions must be fully documented as evidence of compliance. (Paragraphs 9, 10, 26 and 27)
- Regulatory position – RPBs will scrutinise all joint nominee agreements entered into by IPs from 1 January 2026.