31 July 2017Read More
Recognised Professional Body (RPBs)
What is an RPB?
Overall responsibility for insolvency policy in Great Britain (England, Wales and Scotland) rests with the Secretary of State for Business, Innovation and Skills. On a day-to-day level, the Insolvency Service, through its insolvency practitioner policy section, is responsible for overseeing the insolvency regime on the Secretary of State’s behalf. Insolvency policy and legislation in Northern Ireland is the responsibility of the Northern Ireland Assembly, although it is similar in virtually all respects to that in Great Britain. Insolvency practitioners and the recognised professional bodies.
Under the provisions of the Insolvency Act 1986, the Secretary of State recognises certain independent professional bodies, called recognised professional bodies or RPBs, for the purposes of authorising their members to act as insolvency practitioners. In addition, a small number of insolvency practitioners are authorised by the Secretary of State directly. Only insolvency practitioners can legally act as office holders in insolvency proceedings: as trustees in bankruptcy; liquidators, administrators and administrative receivers of companies; and supervisors of Individual Voluntary Arrangements and Company Voluntary Arrangements.
The Insolvency Service regulates the RPBs to ensure that the members they authorise are fit to act as insolvency practitioners. The RPBs are independent bodies that make their own membership rules and regulations, but they are required to have in place rules to ensure their insolvency practitioners meet acceptable requirements as to education, practical training and experience. The commitments made by the RPBs are set down in a “Memorandum of Understanding”, which records the agreement between the RPBs and the Secretary of State.
One of the main requirements is that individuals must pass the Joint Insolvency Examination to qualify as insolvency practitioners. When they act as an insolvency practitioner the law requires them to have in place a ‘bond’, a form of insurance, against which a claim could be made if the practitioner acts fraudulently or dishonestly. All insolvency practitioners are also subject to regular monitoring visits (at least once every six years, and more frequently if considered necessary) from their authorising bodies – the Insolvency Service, acting on behalf of the Secretary of State, and the RPBs. Monitors seek to establish that insolvency practitioners are adhering to the legislation, and to accepted standards such as Statements of Insolvency Practice (SIPs), the Insolvency Code of Ethics and the relevant rules and regulations of the authorising bodies.
Monitors from the Insolvency Service visit each RPB on a regular basis (usually at least once in three years) to ensure that the RPB is complying with the Memorandum of Understanding. If any RPB fails to meet the requirements, the matter may be referred to the Secretary of State, which could result in its status as a recognised professional body being revoked. Due to the Insolvency Service’s role in monitoring the RPBs, it is often regarded as the “regulator of regulators”.