Proposals were put forward yesterday to transfer the regulation of 60 insolvency practitioners (IPs) from the government to independent regulators.
Business Minister Jo Swinson unveiled the proposal today as part of the Government’s Red Tape Challenge, designed to cut unnecessary functions from regulation.
Swinson said: “Transferring the government’s power to regulate IPs to independent regulators will bring greater clarity and consistency to the regulatory regime. It will also help cut costs in the industry through lower fees.
“The Government can now concentrate on its role as oversight regulator of the insolvency industry.”
IPs currently regulated by the Secretary of State for Business, Innovation and Skills (BIS) would in future be regulated by one of the seven independent regulatory bodies – currently responsible for approximately 1,700 IPs.
The switch is designed to streamline currently regulatory framework and remove a perceived conflict of interest, as well as increasing the range of sanctions available against rogue IPs.
Independent regulatory bodies have a range of sanctions they can impose on IPs who breach regulations, including fines and restricting the number and types of insolvency appointments their members can take.
Proposals were also made to allow insolvency practitioners to qualify in personal or corporate insolvency, or both – as is the case now.
Swinson explained: “Removing the requirement for IPs to be qualified in both personal and corporate insolvency will open up the industry to a greater number of people, which will provide a welcome boost for competition in the sector.”