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Risk based changes to monitoring

Risked based changes to monitoring – Analysis of Risk and Compliance (‘ARC’) Disclosure Sheet and Systems and Controls questionnaire

As members are aware from the Notice to Licence-Holders sent on 20 August 2019, and the information presented at the Regional Roadshows, the IPA resolved to move towards a more risk-based system for monitoring its Licence-Holders with the aim of more efficiently fulfilling its Regulatory Objectives. The requirement to monitor each Licence-Holder is now assessed on risk, which is dependent on a wide number of factors such as type and profile of work undertaken, complaint and monitoring history.   To assist with collecting more data on which to review the risk profile, the IPA have revised the self-certification process to utilise more fully the ease of sharing evidence of compliance via scanned documents. 

ARC Disclosure Sheet

As part of our routine monitoring processes, Licence-Holders will be required to review a selection of your files and confirm the extent to which you consider them to comply with relevant legislation, regulation and expected standards of practice. This is intended to assist you in identifying where systems and procedures might be improved or where there have been shortcomings, and to take remedial steps and implement improvements and changes.

In making the Disclosure, you will be expected to certify that you have complied with your duties as an office-holding Licensed Insolvency Practitioner (as described in the ARC Disclosure Sheet) and identify what steps have been, or are intended to be, taken to remedy or improve the issues identified. Any failure to comply with those duties is referred to as a “non-conformity”.

Disclosure  in the ARC Disclosure Sheet of any non-conformity will not of itself give rise to disciplinary action by the IPA. However:

•  the IPA may take action (including disciplinary action) where it has concerns about the lack of any remedial steps (as defined below) taken or proposed to be taken in relation to any non-conformity;

•  ‘remedial steps’: the IPA expects you to take all such steps as are necessary and capable of being taken to regularise the position so that those who have been deprived/denied by any non-conformity are so far as possible put back in the position that they would have otherwise have been in;

•  for the purposes of enabling the IPA to verify whether such remedial steps have been taken or proposed to be taken, it may require additional information and explanations in respect of the matters disclosed, and it may order an accelerated or targeted inspection visit in order to obtain and/or verify such information and explanations.

When undertaking the file reviews, it will be helpful to refer to the IPA Schedule of Qualitative Issues.

Systems and Controls questionnaire

To further assist with monitoring risk the IPA will ask for additional information relating to Systems and Controls. This will consist of a separate questionnaire, which is similar to the existing pre-visit questionnaire, that will be sent to Licence-Holders to cover additional information that is not captured elsewhere and provides a framework for assessing future monitoring. National firms and any firms with several offices with common working practices will be asked to complete a similar form but this will cover all Licence-Holders within the firm.