Last autumn, Jo Harris and I enjoyed travelling with the ICAEW on their Roadshows (although it has taken us several months to recover!). If you want to know what you missed (or you feel you need a reminder in view of all that has changed in the past six months), here is my personal summary of highlights from last year’s programme.
Bob Pinder, ICAEW’s Director of Professional Standards, explained to us the impacts of the two 2015 Acts primarily on the RPB environment.
As we know, the Small Business Enterprise and Employment Act 2015 introduced new powers for the Insolvency Service to sanction RPBs. However, it is worth remembering that the Secretary of State now also has the power to apply to court for a “direct sanctions order” against an IP “if it appears to the Secretary of State that it would be in the public interest for the order to be made” (S141 of the SBEE Act 2015). Such an order could involve: loss, suspension or restriction of a licence; specific requirements to comply; and/or a contribution to creditors.
Although I am sure that this action will only be contemplated in extreme cases (not least as I’m sure the Service would prefer that the RPBs spend the time and money disciplining IPs), I found this development more than a little disconcerting given the cudgel a certain past Secretary of State swung about when some IPs appeared not to have complied with the employee consultation requirements. As commented on by R3 last November (https://goo.gl/QX6kHM), the 2015 government consultation on this particular issue offered no helpful solution and who knows what (in)action might light the next touch paper in Ministers’ minds.
This was Jo’s and my presentation: an attempt to highlight the principal areas in which we’ve seen IPs trip up. Some of the areas we covered were:
- Getting remuneration right: how to approach the new fees rules
- File management: how to deal with the new Oct-15 IP Regulation on maintaining records to demonstrate administration and material decisions
- Statutory deadlines: how misunderstanding certain rules can make all the difference
- Anti-money laundering and bribery: how to make checklists more effective
- SIP highlights: a quick trip through the SIP series identifying some key and some lesser-known slip-up risks
- Ethics: how to avoid threatening compliance with the principle of professional competence and due care
If you would like to hear the full presentation, Jo has recorded it as a webinar available to all Compliance Alliance webinar subscribers (£250+VAT for firm-wide access to all our webinars for one year)*.
Steven Fennell, Exchange Chambers, explored with ease some key decisions, such as Jetivia SA v Bilta (UK) Limited and Re Corporate Jet Realisations Limited.
Reviewing Steven’s notes now emphasises to me how necessary it is for us to keep up to date with court decisions – so much can happen in six months! Cue plug for R3’s Technical Reviews (starting next month): https://goo.gl/jnnxUA.
Regulatory Hot Topics
Allison Broad, Senior Manager of ICAEW QAD, ran through some regulatory developments and issues seen by the monitoring team. The main points that stood out to me were:
- ICR reminders: as we know, all appointment-taking ICAEW-licensed IPs need to have an ICR each year. Don’t forget that this includes retiring IPs even if they are merely running off their remaining few cases. IPs who move practices also need to make sure that this requirement is not overlooked, which is easily done if their new colleagues have already carried out an ICR earlier in the year.
- Ethics reminders: make sure that ethics checks are carried out and signed off before appointment; initial ethics checks signed off months (or even years!) after appointment are not acceptable. Ethics checks should be signed off by the appointment-taking IP personally, not delegated. Make sure that the ethics check is noted appropriately, e.g. if your Form 2.2B (Statement of Proposed Administrator) discloses a prior relationship, is this noted on the ethics review?
- Anti-Money Laundering reminders: ensure that the files demonstrate the risk-based approach; it is not sufficient simply to state that you consider a subject as “normal” risk, you should be setting out how you reached this conclusion. Also don’t forget to carry out a risk assessment even on court appointments and take appropriate steps consequent to that risk assessment.
- Bonding reminders: make sure that forms calculate the bond correctly, taking into consideration charged assets and prescribed parts. Also, be consistent in calculating the bond level in VAs: you may have difficulty in justifying why you have bonded assets for less than their realisable values as set out in the VA Proposal’s EOS.
- SIP8 reminders: Allison described a surprising flurry of SIP8 breaches as regards S98 reports, e.g. lack of detail in trading history and company accounts and inaccurate deficiency accounts. Therefore, perhaps it would be valuable to refresh your staff’s/template’s treatment of SIP8 disclosures in S98 reports.
The Pre Pack Pool
At a time when we were all awaiting the revised SIP16, Stuart Hopewell, a Director of Pre Pack Pool Limited, gave us a welcome insight into the Pool’s vision… and valiantly tackled a number of enthusiastically-delivered questions from the floor.
Back in December, Allison’s webinar http://goo.gl/ZCzzxR reported that the Pool had received two applications over its first month of operation. I wonder if that number has reached double figures yet…
In conclusion, I would just like to say to those of you who have never attended an ICAEW Roadshow before: please do consider it this year. I found it a valuable overview of core developments – both past and prospective – affecting insolvency, together with several heads-up warnings on how some IPs are getting things wrong and carefully-worded insights into the RPB’s perspective on some serious challenges for IPs, balancing well the ICAEW’s roles as both a regulator and a membership body.
* For more information on the Compliance Alliance’s Compliance Hazards webinar, please email firstname.lastname@example.org