Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016
The Insolvency and Bankruptcy Board of India has issued the Notification on Insolvency and Bankruptcy Board of India. These Regulations shall come into force on 29th November, 2016.
The purpose of the Act is to build up a strong legal system related to the Bankruptcy and Insolvency. This step opens new opportunities of practice for professionals in the areas of Corporate and Individual Insolvency, Corporate Liquidation Process.
Some Code of Conducts to be compiled by Insolvency Professionals:
1. Insolvency professionals must maintain integrity by being honest, straightforward, and forthright in all professional relationships.
2. Insolvency professionals must not misrepresent any facts or situations and should refrain from being involved in any action that would bring disrepute to the profession.
3. Insolvency professionals must act with objectivity in his professional dealings by ensuring that his decisions are made without the presence of any bias, conflict of interest, coercion, or undue influence of any party, whether directly connected to the insolvency proceedings or not.
4. An insolvency professional appointed as an interim resolution professional, resolution professional, liquidator, or bankruptcy trustee should not himself acquire, directly or indirectly, any of the assets of the debtor, nor knowingly permit any relative to do so.
5. An insolvency professional, or his relative must not accept gifts or hospitality which undermines or affects his independence as insolvency professional.
6. Insolvency professionals must maintain and upgrade his professional knowledge and skills to render competent professional service.
7. An insolvency professional must ensure that confidentiality of the information relating to the insolvency resolution process, liquidation or bankruptcy process, as the case may be, is maintained at all times. However, this shall not prevent him from disclosing any information with the consent of the relevant parties or required by law.
8. Insolvency professionals must not conduct business which in the opinion of the Board is inconsistent with the reputation of the profession.
9. An insolvency professional shall not take up an assignment under the Code if he, any of his relatives, any of the partners or directors of the insolvency professional entity of which he is a partner or director, or the insolvency professional entity of which he is a partner or director is not independent, in terms of the Regulations related to the processes under the Code, in relation to the corporate person/ debtor and its related parties.
10. Insolvency professionals must adhere to the time limits prescribed in the Code and the rules, regulations and guidelines thereunder for insolvency resolution, liquidation or bankruptcy process, as the case may be, and must carefully plan his actions, and promptly communicate with all stakeholders involved for the timely discharge of his duties.
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