## Report on the Insolvency and Bankruptcy Board of India Model Bye Laws and Governing Board of Insolvency Professional Agencies Amendment Regulations, 2021
**1. Executive Summary:**
This report analyzes the Insolvency and Bankruptcy Board of India (IBBI) Model Bye Laws and Governing Board of Insolvency Professional Agencies Amendment Regulations, 2021, as notified on January 14, 2021. This amendment aims to refine the existing regulations concerning the governance and operation of Insolvency Professional Agencies (IPAs). The key changes involve shareholder director eligibility norms, director expertise requirements, director disclosure obligations, and the introduction of self-evaluation and a compliance officer role within IPAs. These amendments are intended to enhance the accountability, transparency, and compliance standards of IPAs.
**2. Introduction:**
This report provides an overview of the Insolvency and Bankruptcy Board of India (IBBI) Model Bye Laws and Governing Board of Insolvency Professional Agencies Amendment Regulations, 2021. It analyzes the key provisions of the amendment, its likely rationale, target audience, and potential impact, based solely on the text of the provided notification.
**3. Policy Overview:**
* This document amends the Insolvency and Bankruptcy Board of India Model Bye Laws and Governing Board of Insolvency Professional Agencies Regulations, 2016.
* The core objective of this amendment, as inferred from the text, is to strengthen the governance and compliance framework for Insolvency Professional Agencies, specifically focusing on the composition and responsibilities of their governing boards and internal oversight mechanisms.
**4. Background and Rationale:**
This amendment appears to address potential gaps or weaknesses in the existing regulations of 2016 concerning the governance and operation of Insolvency Professional Agencies. Specifically, the text suggests a need to:
* Clarify the eligibility criteria for shareholder directors.
* Broaden the range of expertise required for directors.
* Ensure directors are accountable and transparent regarding actions that could impact their reputation or suitability.
* Promote self-evaluation and internal compliance mechanisms within IPAs.
The inclusion of the compliance officer and self-evaluation requirements suggests a move towards increased accountability and a proactive approach to regulatory compliance.
**5. Key Provisions / Changes:**
This section details the specific changes introduced by the amendment:
* **Regulation 5, sub-regulation 4:** A new sub-regulation (4A) is inserted, requiring shareholder directors to satisfy eligibility norms, including experience and qualification, as determined by the Governing Board. This clarifies that shareholder directors are subject to eligibility criteria beyond simply being shareholders, empowering the Governing Board to define those criteria.
* **Regulation 5, sub-regulation 6:** Clause (b) is substituted, specifying that a director must have expertise in "finance, law, economics, accountancy, valuation, management or insolvency." This broadens the acceptable fields of expertise for directors, potentially allowing for a more diverse and skilled governing board.
* **Regulation 5:** After subregulation 13, subregulations 14 is inserted requiring a director to disclose any order of any authority that affects his character or reputation, to the insolvency professional agency, within one week of issue of such order and the insolvency professional agency shall placed the copy of the order forthwith on the website of the insolvency professional agency. The director shall forthwith cease to be a director of the insolvency professional agency where the order disqualifies him to be a director of a company.
* **New Regulation 6 (Self-evaluation):** This regulation mandates that the Governing Board evaluate its performance annually within three months of the financial year's closure. The IPA must then publish a report on this self-evaluation on its website. This introduces a new requirement for IPAs to assess and publicly report on their own effectiveness.
* **New Regulation 7 (Compliance Officer):** This regulation establishes the role of a Compliance Officer within the IPA, responsible for ensuring compliance with the Insolvency and Bankruptcy Code (IBC) and related regulations. The Compliance Officer must report non-compliance independently to the Board and submit an annual compliance certificate, co-signed by the Managing Director. The Governing Board is responsible for appointing and removing the Compliance Officer.
**6. Target Audience and Stakeholders:**
The primary target audience and stakeholders are:
* Insolvency Professional Agencies (IPAs) and their Governing Boards.
* Directors of IPAs, particularly shareholder directors.
* The Insolvency and Bankruptcy Board of India (IBBI) as the regulatory body.
* Insolvency Professionals (IPs) who are members of these IPAs.
**7. Implementation Aspects (Inferred):**
* **Responsible Agency/Bodies:** The Insolvency and Bankruptcy Board of India (IBBI) is responsible for enforcing these regulations. The Governing Boards of IPAs are responsible for implementing the changes within their respective organizations.
* **Timelines:**
* The regulations came into force on January 14, 2021 (date of publication in the Official Gazette).
* The Governing Board must evaluate its performance within three months of the closure of each financial year.
* Directors must disclose relevant orders within one week of their issuance.
* The compliance officer needs to submit a compliance certificate annually.
* The Governing Board must also establish the eligibility norms for shareholder directors.
**8. Expected Outcomes / Impact of Changes:**
The likely intended outcomes of these changes are:
* **Enhanced Governance:** Clearer eligibility criteria for shareholder directors and broader expertise requirements for all directors should lead to more effective and qualified governing boards.
* **Increased Transparency:** The director disclosure requirement will enhance transparency and accountability regarding potential conflicts of interest or reputational issues.
* **Improved Compliance:** The introduction of a dedicated Compliance Officer will likely improve adherence to the IBC and related regulations, reducing the risk of non-compliance.
* **Greater Accountability:** The self-evaluation requirement will encourage IPAs to critically assess their performance and identify areas for improvement.
**9. Conclusion:**
The Insolvency and Bankruptcy Board of India Model Bye Laws and Governing Board of Insolvency Professional Agencies Amendment Regulations, 2021, represent a significant step towards strengthening the governance and compliance framework for IPAs. The changes are focused on enhancing the qualifications, accountability, and transparency of IPA directors and promoting a culture of self-evaluation and regulatory compliance within these organizations. These amendments are likely to have a positive impact on the integrity and effectiveness of the insolvency resolution process in India.
Key Entities Referenced
Insolvency and Bankruptcy Board of India: An organisation that is responsible for the regulation and development of the insolvency profession and processes in India.
Insolvency and Bankruptcy Code, 2016: A law in India that consolidates and amends the laws relating to reorganization and insolvency resolution of corporate persons, partnership firms and individuals in a time-bound manner.
Insolvency and Bankruptcy Board of India Model Bye Laws and Governing Board of Insolvency Professional Agencies Regulations, 2016: Regulations established by the Insolvency and Bankruptcy Board of India regarding the model bye-laws and governing board of insolvency professional agencies.
Insolvency and Bankruptcy Board of India Model Bye Laws and Governing Board of Insolvency Professional Agencies Amendment Regulations, 2021: Amendment regulations to the Insolvency and Bankruptcy Board of India Model Bye Laws and Governing Board of Insolvency Professional Agencies Regulations, 2016.
Governing Board: The governing body of an insolvency professional agency responsible for evaluating its performance and deciding eligibility norms for shareholder directors.
Official Gazette: The official government publication where regulations are published to bring them into force.
New Delhi: The location where the notification was issued. New Delhi, NCT of Delhi
M. S. Sahoo: Chairperson of the Insolvency and Bankruptcy Board of India.
Government of India Press, Ring Road, Mayapuri, New Delhi: Government of India Press where the document was printed. Located in New Delhi, NCT of Delhi
Delhi: The location of the Controller of Publications. Delhi, NCT of Delhi
The Insolvency and Bankruptcy Board of India Model Bye laws and Governing Board of Insolvency Professional Agencies Amendment Regulations, 2018: Regulations established by the Insolvency and Bankruptcy Board of India regarding the model bye-laws and governing board of insolvency professional agencies - amendment in 2018.
The Insolvency and Bankruptcy Board of India Model Bye laws and Governing Board of Insolvency Professional Agencies Amendment Regulations, 2019: Regulations established by the Insolvency and Bankruptcy Board of India regarding the model bye-laws and governing board of insolvency professional agencies - amendment in 2019.
The Insolvency and Bankruptcy Board of India Model Bye laws and Governing Board of Insolvency Professional Agencies Amendment Regulations, 2020: Regulations established by the Insolvency and Bankruptcy Board of India regarding the model bye-laws and governing board of insolvency professional agencies - amendment in 2020.
रजिस्ट्री स.ं डी.एल.- 33004/99 REGD. No. D. L.-33004/99
सी.जी.-डी.एल.-अ.-14012021-224407
xxxGIDHxxx
CG-DL-E-14012021-224407
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असाधारण
EXTRAORDINARY
भाग III—खण् ड 4
PART III—Section 4
प्राजधकार स ेप्रकाजित
PUBLISHED BY AUTHORITY
स.ं 23] नई दिल्ली, बृिस्ट्प जतवार, िनवरी 14, 2021/पौष 24, 1942
No. 23] NEW DELHI, THURSDAY, JANUARY 14, 2021/PAUSHA 24, 1942
भारतीय दिवाला और िोधन अक्षमता बोड ड
अजधसचू ना
नई दिल्ली,14 िनवरी, 2021
भारतीय दिवाला और िोधन अक्षमता बोडड (आिि डउप-जवजधया ंऔर दिवाला व्यावसाजयक एिजें सयों का िासी बोडड)
(सिं ोधन) जवजनयम, 2021
आई.बी.बी.आई./2020-21/िी.एन./आर.ई.िी.068.—भारतीय दिवाला और िोधन अक्षमता बोडड, दिवाला
और िोधन अक्षमता संजिता, 2016 (2016 का 31) की धारा 240 के साथ पठित धारा 196, धारा 203 और धारा 205
द्वारा प्रित्त िजियों का प्रयोग करते हुए, भारतीय दिवाला और िोधन अक्षमता बोडड (आििड उप-जवजधयां और दिवाला
व्यावसाजयक एिेंजसयों का िासी बोडड) जवजनयमन, 2016 का और संिोधन करन े के जलए जनम्नजलजखत जवजनयम बनाता ि,ै
अथाडत:्—
1. (1) इन जवजनयमों का संजक्षप्त नाम भारतीय दिवाला और िोधन अक्षमता बोड ड (आिि ड उप-जवजधयां और दिवाला
व्यावसाजयक एिेंजसयों का िासी बोडड) (संिोधन) जवजनयम, 2021 ि।ै
(2) य ेरािपत्र म ेंउनके प्रकारिन की तारीख को प्रवृत्त िोंगे ।
2. भारतीय दिवाला और िोधन अक्षमता बोड ड (आिि ड उप-जवजधयां और दिवाला व्यावसाजयक एिेंजसयों का िासी बोडड)
जवजनयमन, 2016 (जिन्ि ेंइसमें इसके पाात ्मलू जवजनयम किा गया ि)ै के जवजनयम 5 म,ें—
(i) उप-जवजनयम (4) के पाात,् जनम्नजलजखत उप-जवजनयम अतं ःस्ट्थाजपत दकया िाएगा, अथाडत्:—
211 GI/2021 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART III—SEC.4]
“(4क) िेयरधारक जनिेिक ऐसा व्यजि िोगा िो िासी बोड ड द्वारा यथा-जवजनजात पात्रता मानिंडों को, जिसके
अंतगतड अनभभव और अितड ा भी ि,ै परू ा करता ि ै।”;
(ii) उप-जवजनयम (6) में, खंड (ख) के स्ट्थान पर, जनम्नजलजखत खंड रखा िाएगा, अथाडत्:—
“(ख) जिसके पास जवत्त, जवजध, अथडिास्त्र, लेखांकन, मूल्यांकन, प्रबंधन या दिवाला के क्षेत्र में जविेषज्ञता िै;”;
(iii) उप-जवजनयम (13) के पाात्, जनम्नजलजखत उप-जवजनयम अंतःस्ट्थाजपत दकया िाएगा, अथातड ्:—
“(14) कोई जनिेिक, दकसी प्राजधकारी के ऐसे दकसी आिेि को, िो उसके आचरण या ख्याजत को प्रभाजवत करता
ि,ै ऐसा आिेि िारी दकए िान े के एक सप्ताि के भीतर दिवाला व्यावसाजयक एिेंसी को प्रकक करेगा:
परन्त भआििे की एक प्रजत दिवाला व्यावसाजयक एिेंसी की वैबसाइक पर तत्काल डाली िाएगी;
परन्त भ यि और दक ऐसा जनििे क विां तत्काल दिवाला व्यावसाजयक एिेंसी का जनिेिक निीं रिगे ा ििां ऐसा
आिेि उसे दकसी कंपनी का जनिेिक िोने स े जनरर्ितड करता ि ै।”।
3. मूल जवजनयमों के जवजनयम 5ख के पाात्, जनम्नजलजखत जवजनयम अंतःस्ट्थाजपत दकए िाएंगे, अथाडत्:-
“6. स्ट्वमल्ू याकं न
(1) िासी बोडड, दकसी जवत्तीय वष ड म ें अपन े कायड-जनष्पािन का मूल्यांकन वष ड की समाजप्त के तीन मास के भीतर
उसके द्वारा जवजनजात रीजत में करेगा ।
(2) दिवाला व्यावसाजयक एिेंसी, उप-जवजनयम (1) म ें जनर्ििड स्ट्वमल्ू यांकन की ठरपोकड अपनी वैबसाइक पर
प्रकाजित करेगी ।
7. अनपभ ालन अजधकारी
(1) दिवाला व्यावसाजयक एिेंसी ऐसा अनभपालन अजधकारी अजभजित या जनयभि करेगी िो संजिता और जवजनयमों
के उपबंधों, उसके अधीन िारी दकए गए पठरपत्रों, दििाजनिेिों और जनिेिों का अनभपालन सभजनजात करने के जलए
उत्तरिायी िोगा ।
(2) अनभपालन अजधकारी, उप- जवजनयम (1) म ें जनर्ििड उपबंधों के दकसी अननभपालन के बारे में तरभ ंत और जनष्पक्ष
रूप से बोडड को ठरपोकड करेगा ।
(3) अनपभ ालन अजधकारी, बोडड को वार्षडक रूप से यि सत्याजपत करते हुए एक अनपभ ालन प्रमाणपत्र प्रस्ट्तभत करेगा
दक दिवाला व्यावसाजयक एिेंसी ने उप- जवजनयम (1) में जनर्ििड उपबंधों का अनपभ ालन दकया िै:
परन्त भ वार्षडक अनपभ ालन प्रमाणपत्र पर दिवाला व्यावसाजयक एिेंसी के प्रबंध जनिेिक द्वारा भी िस्ट्ताक्षर दकए
िाएंगे ।
(4) िासी बोडड, अपनी बैिक में पाठरत दकसी संकल्प के माध्यम से िी दकसी अनभपालन अजधकारी को जनयिभ
करेगी या िकाएगी ।”।
डॉ. एम. एस. साहू, अध्यक्ष
[जवज्ञापन-III/4/असा./459/2020-21]
ठकप्पण: भारतीय दिवाला और िोधन अक्षमता बोडड (आििड उप-जवजधयां और दिवाला व्यावसाजयक एिेंजसयों का िासी
बोडड) जवजनयम, 2016, भारत के रािपत्र, असाधारण, भाग III, खंड 4, सं. 421, तारीख 22 नवम्बर, 2016 म ें
अजधसूचना सं. आई.बी.बी.आई./2016-17/िी.एन./आर.ई.िी.001, तारीख 21 नवम्बर, 2016 द्वारा प्रकाजित
दकए गए थे और तत्पाात् उनमें—[भाग III—खण् ड 4] भारत का रािपत्र : असाधारण 3
(1) भारत के रािपत्र, असाधारण, भाग III, खंड 4, सं. 383, तारीख 11 अिूबर, 2018 में अजधसूचना
सं. आई.बी.बी.आई./2018-19/िी.एन./आर.ई.िी.35, द्वारा प्रकाजित भारतीय दिवाला और िोधन
अक्षमता बोडड (आििड उप-जवजधयां और दिवाला व्यावसाजयक एिेंजसयों का िासी बोडड) (संिोधन) जवजनयम,
2018;
(2) भारत के रािपत्र, असाधारण, भाग III, खंड 4, सं. 260, तारीख 23 िलभ ाई, 2019 में अजधसूचना
सं. आई.बी.बी.आई./2019-20/िी.एन./आर.ई.िी.043, द्वारा प्रकाजित भारतीय दिवाला और िोधन
अक्षमता बोडड (आििड उप-जवजधयां और दिवाला व्यावसाजयक एिेंजसयों का िासी बोडड) (संिोधन) जवजनयम,
2019; और
(3) भारत के रािपत्र, असाधारण, भाग III, खंड 4, सं. 155, तारीख 24 अप्रलै , 2020 में अजधसूचना
सं. आई.बी.बी.आई./2020-21/िी.एन./आर.ई.िी.058, द्वारा प्रकाजित भारतीय दिवाला और िोधन
अक्षमता बोडड (आििड उप-जवजधयां और दिवाला व्यावसाजयक एिेंजसयों का िासी बोडड) (संिोधन) जवजनयम,
2020, द्वारा उनमें संिोधन दकए गए ।
INSOLVENCY AND BANKRUPTCY BOARD OF INDIA
NOTIFICATION
New Delhi, the 14th January, 2021
Insolvency and Bankruptcy Board of India (Model Bye- Laws and Governing Board of Insolvency Professional
Agencies) (Amendment) Regulations, 2021
No. IBBI/2020-2021/GN/REG068.—In exercise of the powers conferred by sections 196, 203 and 205 read
with section 240 of the Insolvency and Bankruptcy Code, 2016 (31 of 2016), the Insolvency and Bankruptcy Board of
India hereby makes the following regulations further to amend the Insolvency and Bankruptcy Board of India (Model
Bye- Laws and Governing Board of Insolvency Professional Agencies) Regulations, 2016, namely—
1. (1) These regulations may be called the Insolvency and Bankruptcy Board of India (Model Bye-Laws and
Governing Board of Insolvency Professional Agencies) (Amendment) Regulations, 2021.
(2) They shall come into force on the date of their publication in the Official Gazette.
2. In the Insolvency and Bankruptcy Board of India (Model Bye- Laws and Governing Board of Insolvency
Professional Agencies) Regulations, 2016 (hereinafter referred to as the principal regulations), in regulation 5,—
(i) after sub-regulation (4), the following sub-regulation shall be inserted, namely:—
“(4A) A shareholder director shall be an individual, who satisfies the eligibility norms, including experience and
qualification, as decided by the Governing Board.”;
(ii) in sub-regulation (6), for clause (b), the following clause shall be substituted, namely:—
“(b) who has expertise in the field of finance, law, economics, accountancy, valuation, management or
insolvency;”;
(iii) after sub-regulation (13), the following sub-regulations shall be inserted, namely:—
“(14) A director shall disclose any order of any authority that affects his character or reputation, to the insolvency
professional agency, within one week of issue of such order:
Provided that a copy of the order shall be placed forthwith on the website of the insolvency professional
agency;4 THE GAZETTE OF INDIA : EXTRAORDINARY [PART III—SEC.4]
Provided further that such director shall forthwith cease to be a director of the insolvency professional
agency where the order disqualifies him to be a director of a company.”.
3. In the principal regulations, after regulation 5B, the following regulations shall be inserted, namely:-
“6. Self-evaluation.
(1) The Governing Board shall evaluate its performance in a financial year within three months of the closure of
the year, in the manner decided by it.
(2) The insolvency professional agency shall publish a report on self-evaluation referred to in sub-regulation (1)
on its website.
7. Compliance Officer.
(1) An insolvency professional agency shall designate or appoint a compliance officer who shall be responsible
for ensuring compliance with the provisions of the Code and regulations, circulars, guidelines, and directions
issued thereunder.
(2) The compliance officer shall, immediately and independently, report to the Board any non-compliance of the
provisions referred to in sub-regulation (1).
(3) The compliance officer shall submit a compliance certificate to the Board annually, verifying that the
insolvency professional agency has complied with the provisions referred to in sub-regulation (1):
Provided that the annual compliance certificate shall also be signed by the managing director of the
insolvency professional agency.
(4) The Governing Board shall appoint or remove the compliance officer only by means of a resolution passed in
its meeting”.
Dr. M. S. SAHOO, Chairperson
[ADVT.-III/4/Exty./459/2020-21]
Note: The Insolvency and Bankruptcy Board of India (Model Bye- laws and Governing Board of Insolvency
Professional Agencies) Regulations, 2016 were published vide notification No. IBBI/2016-17/GN/REG001
dated 21st November, 2016 in the Gazette of India, Extraordinary, Part III, Section 4, No. 421 on 22nd
November, 2016 and were subsequently amended by—
(1) The Insolvency and Bankruptcy Board of India (Model Bye- laws and Governing Board of
Insolvency Professional Agencies) (Amendment) Regulations, 2018 published vide notification
No. IBBI/2018-19/GN/REG35 dated 11th October, 2018 in the Gazette of India, Extraordinary, Part III,
Section 4, No. 383 on 11th October, 2018;
(2) The Insolvency and Bankruptcy Board of India (Model Bye- laws and Governing Board of
Insolvency Professional Agencies) (Amendment) Regulations, 2019 published vide notification
No. IBBI/2019-20/GN/REG043 dated 23rd July, 2019 in the Gazette of India, Extraordinary, Part III,
Section 4, No.261 on 23rd July, 2019; and
(3) The Insolvency and Bankruptcy Board of India (Model Bye- laws and Governing Board of
Insolvency Professional Agencies) (Amendment) Regulations, 2020 published vide notification
No. IBBI/2020-21/GN/REG058 dated 20th April, 2020, in the Gazette of India, Extraordinary, Part III,
Section 4, No.155 on 24th April, 2020.
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