The Insolvency Service GB has published the long awaited Consultation: The Future of Insolvency Regulation. This paper consults on proposals to strengthen the insolvency regulatory framework. The Government’s preferred option is to create a Single Regulator to replace the four authorising bodies (CAI, ICAS, ICAEW, IPA). In addition, the Government is also recommending the regulation of firms and not just individual Insolvency Practitioners in certain circumstances. The proposed new regulatory model would apply to England, Scotland and Wales. Insolvency, including regulation of insolvency, is a transferred function in Northern Ireland, although there is close alignment of the insolvency and regulatory frameworks between Great Britain and Northern Ireland. However, the document states that the Government will liaise closely with the Northern Ireland Executive to consider the impact of the reforms in Northern Ireland. The Institute will be responding to this Consultation with responses to be submitted by 25 March 2022. For more information see The future of insolvency regulation - GOV.UK (www.gov.uk).

From 22 December 2021 the Institute of Chartered Accountants of Scotland (‘ICAS’) is no longer a recognised accountancy body (RAB) in Ireland.  As notified to Institute members and firms in recent news items and in direct communication to audit compliance principals, the revocation of ICAS’s RAB status will have implications for Institute registered audit firms who include ICAS members amongst the firm’s responsible individuals (RIs) or amongst the qualified majority of owners and management board members of the audit firm.  Firms have been advised of the appropriate actions to take in this regard.  Such actions include relevant individuals applying for reciprocal membership of the Institute. The revocation of the recognition of ICAS as a RAB follows on the derecognition of the Institute of Chartered Accountants in England and Wales (‘ICAEW’) on 21 July 2021.  The issues arising for ICAEW members at Institute firms from that time are the same as those arising now for ICAS members. It has been necessary to amend the Institute’s Audit Regulations and Guidance (effective 1 January 2020) (‘the Audit Regulations – Ireland’) to reflect the fact that ICAEW and ICAS ceased to be RABs on 21 July 2021 and 22 December 2021 respectively.  This amendment has been made by way of an addendum to the Audit Regulations – Ireland (‘The December Addendum). The December Addendum includes amendment to the definitions of ‘Institute’, ‘appropriate qualification’, ‘audit affiliate’ and ‘practising certificate’ and clarifies a reference in guidance to the eligibility of reciprocal members for audit registration. The December Addendum is effective from 22 December 2021 and is to be read in conjunction with the Audit Regulations - Ireland. The December Addendum supersedes a similar addendum, now withdrawn, which was issued to reflect the derecognition of ICAEW as a RAB in July 2021. The Addendum and the Audit Regulations -Ireland, which are to be read together, are available on the Institute’s website. In addition, the Institute’s Public Practice Regulations have been amended with effect from 22 December 2021 to provide clarity in relation the requirements for practising certificates (‘PCs’) for reciprocal members who are also members of ICAEW or ICAS and hold a PC from ICAEW or ICAS respectively.  The change has been made at Regulation 5.2A of the Public Practice Regulations which are available to read on the Institute’s website.

Professional Standards has published its first Report on UK AML Supervision. This covers the period April 2020 – April 2021.

Our Individual Annual Return 2021 is currently available for completion online.  Please be reminded that this was due to be submitted by 29 October 2021. If you have yet to complete and submit your return, we would encourage you to do this at your earliest opportunity. Click here for your Individual Annual Return. We appreciate that this is a difficult period for members due to the Coronavirus and that members will be prioritising matters differently than they would in normal times. If unable to meet this timescale please contact Individual Annual Return.

The way you submit Suspicious Activity Reports (SARs) to the National Crime Agency (NCA) is changing. As part of the SARs online programme the NCA are replacing the current SAR online portal. Watch this short video for an online demo of how it will look, the reasons for the changes and how those changes can help improve financial crime intelligence. The changes aren’t due to go live until next year and Professional Standards will keep you informed of the progress.  Please see SAR Online demo - YouTube.

The updated CCAB Economic Crime Manifesto went live on 2 November 2021.

The Professional Standards Department has issued its first Annual Report on its UK anti-money laundering supervisory activities.  The report is a recent requirement of the UK’s anti-money laundering legislation and covers the year to 5th April 2021.  It summarises the approach of Chartered Accountants Ireland to fulfilling its obligations as an AML Professional Body Supervisor in the UK and contains statistical information regarding the population subject to supervision by the Institute.  The report can be accessed here.

The UK Financial Intelligence Unit (UKFIU) is inviting all members of the regulated sector to respond to their short engagement survey, to help the UKFIU understand how well they are currently supporting reporters and the impact of changes being made. Your responses will be used to understand how the UKFIU can continue to improve they work with our sectors. Please complete the survey by clicking the following link: https://www.homeofficesurveys.homeoffice.gov.uk/s/UKFIU_Reporter_Engagement_Survey/.

Chartered Accountants Ireland (‘the Institute’) has, in accordance with its Bye-Laws and by under various statutes in Ireland and the UK, specific supervisory and regulatory obligations in respect of its membership. The Professional Standards Department of the Institute is responsible for the exercise of its regulatory functions through a regime that includes regulatory and disciplinary committees and bodies comprising accountants and non-accountants.  Due to a number of retirements, the Institute is seeking to recruit persons for appointment to the Conduct Committee, the Disciplinary and the Appeal Panel. At present, we are particularly interested in hearing from accountants who may be interested in such roles.  Further information about the Conduct Committee, the Disciplinary and the Appeal Panel as well as the appointment process can be found in the relevant sections of the information pack for applicants.  If you would like to request an application form please email committeerecruitment@charteredaccountants.ie  

Our Individual Annual Return 2021 is now available for completion online.  Please ensure it is submitted by 29 October 2021. Click here for your Individual Annual Return.

IAASA has recently advised that it is considering the application from the Institute of Chartered Accountants of Scotland (ICAS) for the revocation of ICAS’ status as a Recognised Accountancy Body (RAB) under Irish company law from December 2021. This would mean that after the relevant date in December 2021, ICAS would have no authority to qualify or approve statutory auditors or statutory audit firms in Ireland.   This has implications for Institute firms who include ICAS members amongst the firm’s responsible individuals (RIs) or amongst the qualified majority of owners and management board members of the audit firm. The Institute has considered the issues involved earlier this year when the Institute of Chartered Accountants in England and Wales (‘ICAEW’) ceased to be a RAB on 21 July 2021. At that time the Institute identified a solution which causes minimal disruption to these Institute firms as a result of ICAEW’s cessation as a RAB and the same approach can be applied in the event that ICAS ceases to be a RAB. Eligibility for statutory auditor (responsible individual/RI) status in Ireland is dependent on being a member of a RAB as well as holding the appropriate qualification. An ICAS member who is a RI at an Institute firm should become a member of another RAB before the date on which ICAS RAB status is revoked. The Institute (a RAB) has in place a reciprocal membership agreement with ICAS under which a member of ICAS can easily become a member of the Institute so long as membership of ICAS is also retained.     Similarly, ICAS members who are currently counted in the qualified majority of owners and management board members at Institute approved audit firms will need to become members of another RAB by the agreed revocation date to ensure that the firm’s ongoing eligibility for Irish audit registration is unaffected. The Institute will continue to recognise the audit qualification awarded by ICAS before the revocation date as an appropriate qualification for audit approval purposes.  ICAS members who wish to apply for reciprocal membership of the Institute can do so by contacting the Registry and Subscriptions team. In the coming weeks, the Institute’s Professional Standards Department will write to the audit compliance principals at Institute firms approved for audit in Ireland in relation to the matters outlined above. Queries on these matters can be addressed to Professional Standards by email. If ICAS ceases to be a RAB then its status as a prescribed accountancy body (PAB) under Irish company law also comes to an end. This has implications for ICAS members who undertake insolvency appointments in Ireland. Individuals who are affected in this regard should contact ICAS for further advice.

The Joint Insolvency Committee (JIC) is consulting on changes to Statement of Insolvency Practice 3.1 - Individual Voluntary Arrangements. JIC undertook a consultation issued in May 2020 which included revisions to SIP 3.1. At that time these revisions had been identified as being relevant changes as part of a review of SIP 3.2 on Company Voluntary Arrangements. No detailed review of SIP 3.1 was carried out at that time. This consultation builds on the work carried out in 2020 and the draft revised SIP 3.1 now being consulted follows a detailed review of SIP 3.1. The detailed review was carried out by a working group of the Joint Insolvency Committee which comprised of insolvency professionals and other participants in the individual voluntary arrangement (IVA) process, including HMRC and the Insolvency Service. SIP 3.1 was last updated in 2014, since that date the IVA market has changed considerably both in terms of the numbers of IVAs commencing each year (2014 c. 51,000 to 2019 c. 78,000) and with the growth of ‘Volume Providers’(VPs), Although operating within the same statutory and regulatory framework as other insolvency practitioners, the VPs apply a different business model which relies on a standardised product and computer assisted case management to client debtors’ demand for IVAs.   There has also been a growth in providers of pre-insolvency services. These include lead generators and debt packagers, some activities of which are regulated by the Financial Conduct Authority (FCA).  The draft revised SIP 3.1 places more emphasis on the advice stage of the debt solution process and aims to make an Insolvency Practitioner’s (IP’s) responsibility to have procedures in place to ascertain whether the debtor has received adequate and appropriate advice on the options available to them more explicit. The draft revised SIP 3.1 incudes a greater emphasis on documenting the process, including, where appropriate, advice calls, and on providing information to creditors that is more extensive and useful to them than before. The consultation will commence on 12 August 2021 and will be open for a period of 12 weeks, closing on 5 November 2021. The JIC recognises that these are testing times, these are, however, only proposed changes. There is no intention to amend SIP 3.1 without careful consideration of the responses received and any plan to introduce changes will take into account any continuing challenges faced by the insolvency profession. The JIC is now seeking your views on the proposed changes to SIP 3.1 and there is an opportunity in the consultation questionnaire, attached, to suggest other changes to SIP 3.1. SIP 3.1 applies in England and Wales and Northern Ireland. A separate review of SIP 3.3 on Trust Deeds and which applies in Scotland is being undertaken and will be subject to a separate consultation in due course. View the changes to the SIP here.   

From 21 July 2021 the Institute of Chartered Accountants in England and Wales (‘ICAEW’) is no longer a recognised accountancy body (RAB) in Ireland.  As notified to Institute members and firms in recent news items and in direct communication to audit compliance principals, the revocation of ICAEW’s RAB status will have implications for Institute registered audit firms who include ICAEW members amongst the firm’s responsible individuals (RIs) or amongst the qualified majority of owners and management board members of the audit firm.  Firms have been advised of the appropriate actions to take in this regard. It has been necessary to amend the Institute’s Audit Regulations and Guidance (effective 1 January 2020) (‘the Audit Regulations – Ireland’) to reflect the fact that ICAEW ceased to be a RAB on 21 July 2021.  This amendment has been made by way an addendum to the Audit Regulations – Ireland (‘The Addendum).  The Addendum is effective from 21 July 2021 and is to be read in conjunction with the Audit Regulations - Ireland. The Addendum sets out changes to the Audit Regulations – Ireland which are required to reflect the change in ICAEW’s status on 21 July 2021 and to ensure that the Audit Regulations – Ireland continue to be fit for purpose after that date.   The Addendum includes amendment to the definitions of ‘Institute’, ‘appropriate qualification’, ‘audit affiliate’ and ‘practising certificate’ and clarifies a reference in guidance to the eligibility of reciprocal members for audit registration. Until 21 July 2021 the Audit Regulations – Ireland, have been issued jointly by the Institute, ICAEW and the Institute of Chartered Accountants of Scotland.   From 21 July 2021 ICAEW ceased to apply the Audit Regulations – Ireland.   From 1 January 2021 the Audit Regulations – Ireland only apply to Ireland and separate draft Audit Regulations and Guidance for the UK were issued on that date to reflect the change in relationship between the UK and EU as a consequence of Brexit.  A full update of the Audit Regulations – Ireland is planned in due course.   The Addendum and the Audit Regulations - Ireland, which are to be read together, are available on the Institute’s website.

The UK Financial Intelligence Unit has introduced a new SAR glossary code for money laundering through markets (MLTM).MLTM is money laundering taking place within capital markets in which shares, derivatives, bonds and other instruments are bought and sold. An explanatory note re the new code is available here The revised SAR Glossary Codes and Reporting Routes document which is now on the National Crime Agency website at: https://www.nationalcrimeagency.gov.uk/who-we-are/publications/517-glossary-codes-and-reporting-routes-may-2021/file  The purpose of this booklet is to provide guidance on the use of Suspicious Activity Report (SAR) glossary codes and reporting routes.

IAASA has recently advised that the Institute of Chartered Accountants in England and Wales (ICAEW) will cease to be a Recognised Accountancy Body (RAB) under Irish company law from 21 July 2021 and will thereafter have no authority to qualify or approve statutory auditors or statutory audit firms in Ireland. Unsurprisingly, the Institute has had a number of enquiries regarding ongoing eligibility for audit registration in Ireland from Institute firms who include ICAEW members amongst the firm’s responsible individuals (RIs) or amongst the qualified majority of owners and management board members of the audit firm.   The Institute has taken legal advice on the issues involved and has identified a solution which will cause minimal disruption to these Institute firms as a result of ICAEW’s cessation as a RAB. Eligibility for statutory auditor (responsible individual/RI) status in Ireland is dependent on being a member of a RAB as well as holding the appropriate qualification.  An ICAEW member who is a RI at an Institute firm should become a member of another RAB before 21 July 2021.  The Institute (a RAB) has in place a reciprocal membership agreement with ICAEW under which a member of ICAEW can easily become a member of the Institute so long as membership of ICAEW is also retained.     Similarly, ICAEW members who are currently counted in the qualified majority of owners and management board members at Institute approved audit firms will need to become members of another RAB by 21 July 2021 to ensure that the firm’s ongoing eligibility for Irish audit registration is unaffected. The Institute will continue to recognise the audit qualification awarded by ICAEW before 21 July 2021 as an appropriate qualification for audit approval purposes.  ICAEW members who wish to apply for reciprocal membership of the Institute can do so by contacting the Membership Department at registry@charteredaccountants.ie. In the coming weeks, the Institute’s Professional Standards Department will write to the audit compliance principals at Institute firms approved for audit in Ireland in relation to the matters outlined above.  Queries on these matters can be addressed to professionalstandards@charteredaccountants.ie.

Guidance on the Requirements for independent scrutiny of the disposal of assets in administration, including pre-pack sales The Administration (Restrictions on Disposal etc. to Connected Persons) Regulations 2021 came into force on 30 April 2021. The Insolvency Service has published Guidance to assist in the application of these Regulations.

Following a Joint Insolvency Committee (JIC) consultation, changes were made to Statement of Insolvency Practice (SIP) 9 with effect from 1 April 2021. The introduction of the revised SIP 9 has resulted in the Recognised Professional Bodies (RPBs) being asked a number of questions surrounding its practical operation.  Click on the link provided for a list of the FAQs.

A new IVA protocol 2021 has just been published by the Insolvency Service. A Dear IP, with further information, will be issued shortly for practitioners. The IVA protocol is a voluntary agreement, which provides an agreed standard framework for dealing with straightforward consumer IVAs and applies to both IVA providers and creditors.

Changes to SIP 16 and SIP 13 – Effective Date 30 April 2021 The Administration (Restrictions on Disposal etc. to Connected Persons) Regulations 2021 (the Regulations) came into effect on 30 April 2021. The Regulations impose additional obligations on connected person purchasers in administrations. Equivalent legislation is not yet in force in Northern Ireland. SIP Changes These legislative changes mean that it has been necessary to make changes to Statement of Insolvency Practice 16 (pre packaged sales in administrations) and Statement of Insolvency Practice 13 (disposal of assets to connected parties in an insolvency process) to align the content of the SIPs with the law. No changes have been made to the SIPs other than those required by the change in the law. The revised SIPs are SIP 16 - pre packaged sales in administrations (England and Wales) SIP 16 - pre packaged sales in administrations (Scotland) SIP 13 - disposal of assets to connected parties in an insolvency process (England and Wales) SIP 13 - disposal of assets to connected parties in an insolvency process (Scotland) The Joint Insolvency Committee has amended SIP 16 to remove references to the Pre Pack Pool and to replace these with reference to the statutory obligation placed on a connected person purchaser to obtain the opinion of an evaluator. The Regulations apply to transactions that take place within 8 weeks of the appointment of an administrator. This extends the scope of the Regulations beyond pre pack administrations to all administrations within that time frame. That means equivalent changes had to be made to SIP 13 as it applies to any connected party transaction in an insolvency process. Effective Date The new SIPs are effective from 30 April 2021. IPs should take care to familiarise themselves with the Regulations and the new SIPs prior to that date. No changes in Northern Ireland at this time Northern Ireland has yet to enact equivalent legislation, though it is expected to adopt similar requirements by 29 June 2021. Until that time, the changes to SIP 16 and SIP 13 will only apply in England and Wales and Scotland. Statement of Insolvency Practice 4 - disqualification of directors When new legislative provisions for the reporting obligations of insolvency office holders on the conduct of those who formerly controlled a company came into effect from 6 April 2016 it was intended that Statement of Insolvency Practice 4 (SIP 4) - disqualification of directors would be withdrawn. However, there were still some ongoing cases where an office holder was able to submit a paper conduct return rather than use the online reporting tool. The Insolvency Service has informed the Joint Insolvency Committee that all such cases should now be complete. SIP 4 will therefore be withdrawn effective 30 April 2021

Professional Standards Department has just published Issue 28 of the Regulatory Bulletin. Click on the link provided to access this publication.

Regulatory Fee invoices for 2021 are available online at the Myaccount portal of the website. If you are having any problems or difficulty accessing these or making payment, please contact Sam Smiley, Professional Standards Dept.