The Government has today (12 September 2023) announced an overhaul of insolvency regulation in an attempt to modernise the framework, increase transparency and bolster confidence in the existing regulations.
Gareth Hunt, Insolvency Practitioner and Head of Business Recovery at RPG Business Recovery incorporating Crawfords provides his overview.
“Perhaps the most significant announcement is the expansion of the regulations to require firms providing insolvency services to be regulated as opposed to the current situation in which only the individual Insolvency Practitioners are regulated.
“This has become necessary as there are many more large firms providing insolvency services and the Government will want to have the power to impose more meaningful penalties on any businesses involved in potential wrongdoing.
“There will be a public register of all individuals and firms that provide insolvency services which will identify any individuals or firms who are subject to sanctions by their regulator.
“This will certainly improve transparency and enable people to take a more informed decision at what is likely to be a very difficult and stressful time for them.
“An expansion of the current system of bonding is also planned which will help support losses incurred by creditors in the event of fraud or dishonesty.
“It will be interesting to see how and when these proposals are implemented.
“Certainly, any steps that improve the transparency and visibility of the industry and the work we do as Insolvency Practitioners will be welcomed.
“I hope that there is continued engagement between the Insolvency Service and Insolvency Practitioners, particularly with those from smaller firms in the industry.
“Hopefully these steps will provide further confidence to the public in the service provided by Insolvency Practitioners in often complex and challenging circumstances.”
Gareth Hunt is an Insolvency Practitioner and Head of the Business Recovery team at RPG Business Recovery incorporating Crawfords which is part of RPG Chartered Accountants.
Background Information
- The government’s press release Major shake-up will modernise insolvency sector regulation – GOV.UK (www.gov.uk)
- The plans for reform follow a public consultation on the future of insolvency regulation, which ran from December 2021 to March 2022 UK: The future of insolvency regulation – GOV.UK (www.gov.uk)
Contact: Jill Murray, Head of Marketing, RPG Chartered Accountants, jmurray@rpg.co.uk
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