The UK Government is consulting on changes to the way the insolvency profession is regulated
The UK government is consulting on changes to the way the insolvency profession is regulated. The current system has been in place for over 30 years and needs reform to be able to keep pace with developments in the insolvency market. The key changes set out in the consultation include:
- Establishing a single independent regulator to sit within the Insolvency Service, replacing the current system of using Recognised Professional Bodies
- Extending regulation to firms that offer insolvency services, as the current regime only covers individual Insolvency Practitioners
- Creating a public register of all individuals and firms that offer insolvency services
- Creating a system of compensation and redress
- Amendments to the current arrangements for Insolvency Practitioners to hold security (bonding) to cover losses in the event of fraud or dishonesty
These changes will, says the Insolvency Service, help strengthen and modernise the regulatory regime which will be essential to encouraging business and investment as the country builds back from the pandemic. They will help improve public confidence and ensure the UK maintains its reputation as having a first-class insolvency jurisdiction.
The consultation closes on 24 March 2022.
