How the IPA is Governed
The Insolvency Service is the oversight regulator of the insolvency profession
The overarching aim of the Insolvency Service and the IPA is to ensure that those affected by the work of insolvency practitioners have confidence that the regulatory regime encourages best practice and deals effectively and consistently with any poor performance or misconduct.
The Insolvency Service has published guidance to assist in the Recognised Professional Bodies’ (RPBs) compliance with the regulatory objectives. This can be found here: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/482904/Guidanceforpublication.pdf
Of the four regulators, the IPA is the largest by volume of work covered.
The RPBs are recognised as bodies which authorise and regulate insolvency practitioners as set out in the Insolvency Act 1986 (IA86). The Small Business Enterprise and Employment Act 2015 introduced a range of proportionate oversight sanctions into the IA86, which enables the Secretary of State for Business, Energy and Industrial Strategy to:
- direct an RPB to take action or to refrain from taking a particular course of action;
- impose a financial penalty on an RPB;
- issue a reprimand to an RPB; and
- apply to court to directly sanction an insolvency practitioner, where it is in the public interest to do so.
The Insolvency Service has overall responsibility on behalf of the Secretary of State for ensuring that the activities of the RPBs that authorise and licence insolvency practitioners are in line with regulatory objectives set out in part 13 of the Insolvency Act 1986.
These objectives include a system of regulating insolvency practitioners which promotes fair and consistent outcomes, maximises returns to creditors and protects and promotes the public interest. As part of their oversight activities, the Insolvency Service undertakes monitoring visits to the RPBs using a risk-based approach to assess their extent and frequency.
See our most recent report by the Insolvency Service here: https://www.gov.uk/government/publications/the-insolvency-practitioners-association-monitoring-report
Memorandum of Understanding: Recognised Professional Bodies and the Secretary of State for Business, Energy and Industrial Strategy
To support the insolvency regime, the Secretary of State for Business, Energy and Industrial Strategy (SofS) has agreed a set of principles with the RPBs for the purposes of achieving consistency in the authorisation and regulation of insolvency practitioners. Each body is monitored by the SofS for adherence to these principles.
The RPBs party to the Memorandum of Understanding (MOU) are:
- the Insolvency Practitioners Association;
- the Institute of Chartered Accountants in England and Wales;
- the Institute of Chartered Accountants of Scotland; and
- the Institute of Chartered Accountants in Ireland.
Anti-Money Laundering Regulation & the Office for Professional Body Anti-Money Laundering Supervision
In addition to our regulatory responsibilities, the IPA is a listed Anti-Money Laundering (AML) Professional Body Supervisor (PBS), meaning that the IPA is responsible for monitoring our members’ compliance with money laundering regulations when carrying out their insolvency and advisory work.
This is a relatively new role for the IPA, but this is a role that is key to putting AML at the heart of our regulatory responsibilities and to highlight to our members, other PBSs and the wider public that AML regulatory work is of equal importance to our ‘traditional’ regulatory work around insolvency matters
We are members of external committees that deal with AML, including the Consultative Committee of Accountancy Bodies (CCAB), a forum with the aim of working together for the benefit of the profession, wider economy and the public interest; and the Accountancy AML Supervisors’ Group (AASG), made up of professional bodies working in collaboration to maintain consistent standards and best practice. We also support the Government’s Flag it Up campaign.
Click here to visit the Anti-Money Laundering Hub section of our website.
Office for Professional Body Anti-Money Laundering Supervision
The Office for Professional Body Anti-Money Laundering Supervision (OPBAS) is a new regulator set up in January 2018 by the Government to strengthen the UK’s Anti-Money Laundering (AML) supervisory regime and ensure the professional body AML supervisors provide consistently high standards of AML supervision.
The Government has established OPBAS as part of a wider package of reforms to strengthen the AML supervisory regime in the United Kingdom.
OPBAS is housed within the Financial Conduct Authority (FCA) and will facilitate collaboration and information sharing between the professional body AML supervisors, statutory supervisors, and law enforcement agencies.
OPBAS aims to improve consistency of professional body AML supervision in the accountancy and legal sectors but does not directly supervise legal and accountancy firms.
Visit www.fca.org.uk/opbas for more information on the work that OPBAS undertake.
OPBAS’s most recent report on PBSs can be found here: https://www.fca.org.uk/publication/opbas/supervisory-report-progress-themes-2019.pdf
Other organisations and the IPA
Financial Conduct Authority
The FCA doesn’t regulate Insolvency Practitioners, but it does regulate lead generation firms that some Insolvency Practitioners use, as well as the debt advice sector, with the IPA and FCA therefore working together on areas of shared interest.
The Financial Conduct Authority (FCA) is the conduct regulator for 59,000 financial services firms and financial markets in the UK.
The Government amended the legislative framework applicable to the credit activities carried out by insolvency practitioners (the link to the applicable statutory instrument 2014/366 is http://www.legislation.gov.uk/uksi/2014/366/contents/made). Insolvency practitioners (IPs) have now been excluded (rather than being subject to exemption) from regulation by the Financial Conduct Authority in two specific circumstances:
- Where an individual is ‘acting as an insolvency practitioner’, the exclusion covers the non-credit activities for which insolvency practitioners were previously exempt, in addition to when providing debt counselling, debt adjusting, debt administration, debt collecting and credit information services;
- Where an individual is ‘acting in reasonable contemplation’ of an appointment as an insolvency practitioner.
IPs within the Individual Voluntary Arrangement (IVA) market continue to use introducer firms, although the IPs within the IPA’s Volume Provider Regulation (VPR) Scheme are asked to use only introducer firms who are regulated by the FCA. The non-regulated firms present a risk and therefore the IPA is currently working with the FCA in relation to sharing intelligence to try and improve the quality and standards of these firms.
Introducer firms, or lead generators, are companies that find people with debt problems, then sell their details to a firm that provides debt solutions.
We also share information in relation to scam websites and websites that do not advertise in line with FCA or Advertising Standards Authority (ASA) guidelines.
For further information about the FCA, visit: https://www.fca.org.uk/about/the-fca
Advertising Standards Authority
The IPA works with the Advertising Standards Authority (ASA) to improve the advertising and marketing elements of Insolvency Practitioners’ work. It is the IPA’s role to ensure that any marketing and advertising employed by an Insolvency Practitioner complies with the insolvency regulations to which all Insolvency Practitioners must adhere. The ASA is the UK’s independent advertising regulator, and its jurisdiction covers all advertising in UK media. It makes sure that advertisements stick to the advertising rules (the Advertising Codes).
The Committee of Advertising Practice (CAP) is the sister organisation of the ASA and is responsible for writing the Advertising Codes. The ASA and CAP are committed to regulating in a way that is transparent, proportionate, targeted, evidence-based, consistent and accountable.
Areas of complaint covered by the ASA:
- Press ads
- Radio and TV ads (including teleshopping presentations)
- Ads on the internet, smartphones and tablets
- Ad claims on companies’ own websites
- Commercial e-mail and text messages
- Leaflets and brochures
- Ads at the cinema
- Direct mail
The IPA have been made aware of a number of scam and copycat websites and any intelligence within this area is referred to the ASA. Members websites are also reviewed to ensure they are not mis-leading or claiming to be anything other than what they are.
Further information on the ASA can be found here: https://www.asa.org.uk/