Special Regulatory Regimes
In addition to our risk-based monitoring, the IPA is responsible for developing and carrying out other specialist regimes.
Volume Provider Regulation Scheme
An Individual Voluntary Arrangement (IVA) is a formal insolvency solution. It is a legally binding agreement between an individual and their creditors to pay back their debts over a period of time. A payment plan is offered to creditors over a period of usually 5 or 6 years and the creditors have to agree to this. An IVA is seen as an alternative to bankruptcy.
Whilst there are other formal and informal debt solutions available, IVAs have proved the most popular option over recent years, with the total number of IVAs rising from 50,693 in 2010 to 328,666 at the end of 2021.
The growth of the IVA and Protected Trust Deed (PTD, the Scottish alternative to an IVA) market presented regulators with new challenges.
Recognising that the volume IVA market needed a new form of regulation to provide assurance that it was functioning as it should, the IPA responded, and, with the full support and engagement of the largest IVA firms in the market, implemented the Volume Provider Regulation (VPR) Scheme.
The IVA/PTD firms that are classed as volume and are regulated by the IPA are all members of the Scheme. The firms within the Scheme all hold over 2% of the overall IVA market, or 2% of new appointments over a rolling three-month period, and 10% of the PTD market.
During 2022, the VPR Scheme covered 63% of the IVA market and 75% of the PTD market. The Scheme market coverage is expected to increase further with new members joining.
The structure and process of the VPR Scheme ensures that regulation continues to focus on areas that require improvement and change. The ability of the IPA Inspectors to continuously monitor the firms in the Scheme has proved a key feature.
Prior to the implementation of the Scheme, volume IVA/PTD provider members would receive one inspection visit every 12 months. Under the Scheme, members receive one full inspection visit per year and up to four focussed reviews along with regular call monitoring. The increased number of visits allows the Inspectors to drill down into any areas that require improvement and are known risk areas within the market, and through shorter monitoring reports we can reach regulatory outcomes at pace. The Scheme Inspectors will benefit from a deeper insight and knowledge of both the IP and the operations being regulated. This is regulation on a scale which we believe is unprecedented in the financial and legal services sector.
Monthly case management information from each firm enables the Inspectors to monitor a number of areas monthly and recognise any areas of concern at an earlier stage – together with monthly working groups and quarterly group meetings.
Developing increased communication with members and creditor groups, and working closely with the complaints team, gives the IPA insight into issues from the debtor, creditor, and IP/firm perspective.
The Scheme continues to evolve as the personal insolvency landscape changes.
Annual Benchmark Reports give further information on Scheme activity. Access the 2022 Benchmark Report here.
Key features of the Scheme
- Continuous monitoring through monthly data returns
- One full visit and up to four focused reviews a year
- Regular call monitoring
- Bespoke investigations into identified areas of concern
- Scheme members provide annual accounts, details of their corporate structures and other data as required
- Monthly meetings between the Chief Inspector and each Scheme member
- Quarterly meetings between the IPA and the Scheme member group
- Offers transparency in the market, which should improve the perception of the industry
- The same inspectors deal with all Scheme firms/IPs and can therefore encourage the same standards across the Scheme in line with Insolvency Service expectations
Focus of the Scheme
During 2021
Areas of focus in 2021 were IVA new appointments/rejections, distributions to creditors, property, marketing and advertising, work introducers, the IVA and PTD Protocols, changes to Debt Relief Order (DRO) criteria, trust cases, creditor relations, mis-selling, fixed fee, Statutory Debt Repayment Plan and transparency of debt solutions, and Anti-Money Laundering (AML).
During 2022
The focus in 2022 was the predicted impact of Covid-19 and cost of living increases on IVA and PTD cases, Statement of Insolvency Practice (SIP) 3.1/3.3 advice, modifications submitted by creditors, work introducers, the Insolvency Service review of personal insolvency landscape, and AML.
2023 focus areas
Scheme Membership
It is anticipated that membership of the Scheme will continue to grow during 2023 with new members joining as and when they meet the criteria.
SIP3.1/3.3 Advice
SIP 3.1/3.3 advice will continue to be monitored during 2023 as the IPA considers that continuous monitoring is key in this area.
Work Introducers
The IPA will continue its work in the work introducer/lead generator area and will determine what steps to take once the outcome of the FCA consultation is known.
The IPA will continue to further its working relationship with the FCA and other parties in this arena.
Review of Personal Insolvency Landscape
The IPA will continue to take an active role in the Insolvency Service’s review of the personal insolvency landscape.
Anti-Money Laundering
The IPA will continue to review risks in the IVA and PTD markets and ensure that firms have effective policies and procedures in place that are able to both identify current risks and adapt as risks change.
Join the Scheme
The Scheme is open to any IP (or firm) who feels they may benefit from the continuous monitoring and dedicated Inspectors who know and understand the firm and offer pragmatic regulation, as well as anyone who would like an opportunity to enhance transparency.
The IPA would be happy to speak to anyone wishing to join the Scheme. Please email ivaworkinggroup@ipa.uk.com for further information.
Useful resources:
The Registered Property Receivers Scheme – a distinguished mark of accreditation
The Registered Property Receivers (RPR) scheme was launched in 1999, with the objective of accrediting professionals who carry out fixed charge or Law of Property Act receivership work, in order to offer assurance on professional standards to those making such appointments – as well as other stakeholders such as creditors and the wider public.
The IPA delivers the scheme working in partnership with the Royal Institution of Chartered Surveyors (RICS) and the Association of Property and Fixed Charge Receivers (Nara), under a tripartite Memorandum of Understanding. In its role, the IPA carries out Scheme administration and the monitoring and inspection of RPRs.
Membership of the Scheme is voluntary, and it can only be granted to those who demonstrate the correct level of skill, knowledge and experience to meet the expected standards.
Scheme members are subject to an ongoing risk-based monitoring regime and Continuing Professional Development (CPD) requirements.
There are currently around 200 RPRs registered in the Scheme. Indications are that a number of leading banks will now only consider appointing those who are RPRs.
For further details, including how to become an RPR or how to find one, visit the Scheme’s dedicated website at www.registeredpropertyreceivers.org.
To ensure that lenders have ready access to, and up-to-date information about, competent and experienced professionals, current members of the Scheme can be viewed on the website.