The latest communication between the Insolvency Service and their doting brigade of IPs seems to say: "Dear IPs. Please could you put your Granny on - we want to enrol her in some egg-sucking training."
Dear IP Issue 128 cloaks its directions as "new guidance" for Practitioners when dealing with the insolvency of regulated businesses, and has apparently been drafted by the twins Barrie and Chalkie Obvious, as it includes such gems as, 'treating customers fairly',' returning client assets and customer funds', and 'facilitating redress claims for consumers'.
"Okay, got it", says the average highly qualified and regulated insolvency professional, "lucky you told me. I was about to pop out and transfer all of the client's assets into my name."
This is actually the fault of the FCA, as the guidance is aimed at IPs appointed, or looking to be appointed, in relation to firms that are solely authorised or registered by the Authority. The FCA authored this guidance under the eye-catching name 'FG21/4', having received 22 responses to an enquiry into such matters, including from IPs, regulatory bodies, trade associations, consumer groups and individuals.
There are 48 pages of guidance in all and it's a real page-turner, so we don't want to spoil it for you. However, to whet your appetite there are some real gems, including (on page three) ... 'the FCA expect the appointed IP to understand the business model and its regulated activities, or have a detailed plan to gain a full understanding of these shortly after their appointment'. We know you were thinking that as you ran the CVL of a traditional sweet shop just last week, dealing with a regulated financial business would be much the same. But it's not.
Whoa, whoa whoa ... did you know that, 'should a firm (or its directors) seek to appoint an Administrator through an out of court process, the Administrator cannot be appointed without our written consent'. That's useful. Also, the service of a statutory demand on a regulated business should also be set to the FCA (that's one for your document packs, unless you have bought NTI's, in which case it is already in there).
Here's another one (which was added to the guidance by the younger sister of someone who had just enrolled onto NTI's CPI course, and must have left their manual open at Module 1), "An IP must take steps to convert the Liquidation to a Creditors’ Voluntary Liquidation if they are of the opinion that the firm will be unable to pays its debts in full". On page eight we are told that, when considering their fees and expenses the FCA would expect an IP to properly record insolvency fees and expenses throughout the insolvency process, and any fees and expenses charged to the client estate should be directly attributable to the distribution of client assets.
Just after that we got to the part where the FCA strongly advised us not to drive on the right-hand side of the road, or to place a kitten in a microwave, and we put the guidance gently to one side to read when we have been jabbed against Covid and are confined to bed with side effects.
If we find anything useful for you we will be back to let you know.