Dear Professional Members,

Insolvency and Bankruptcy Board of India on 23rd July, 2019 has amended several regulations
including the following:

I. Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016 (“IP
regulations”) ;
(https://ibbi.gov.in/webadmin/pdf/whatsnew/2019/Jul/IP%20Regulations%2023072019_2019-07-
23%2020:32:44.pdf)

II. Insolvency and Bankruptcy Board of India (Model Bye-Laws and Governing Board of
Insolvency Professional Agencies) Regulations, 2016 (Model Bye Laws and GB of IPA
Regulations);
(https://ibbi.gov.in/webadmin/pdf/whatsnew/2019/Jul/Model%20Byelaws%20Regulations%2023072
019_2019-07-23%2020:31:06.pdf)

III. IBBI (Insolvency Professional Agencies) Regulations, 2016 (“IPA regulations”)

(https://ibbi.gov.in/webadmin/pdf/whatsnew/2019/Jul/IPA%20Regulations%2023072019_2019-07-
23%2020:31:39.pdf)

The salient features of the amendments are as follows:

1) Introduction of concept of “authorisation for assignment”:

From 1st January, 2020 onwards, no Insolvency Professional will be able to accept or undertake an
assignment under IBC, 2016 unless he holds a valid Authorisation For Assignment (‘AFA’).

“assignment” means any assignment of an insolvency professional as interim resolution professional,

resolution professional, liquidator, bankruptcy trustee, authorised representative or in any other role
under the Code;

AFA will be issued by the Insolvency Professional Agency of which he is a professional member. The
AFA will be valid for 1 year from the date of its issuance or renewal or till the date the professional
member attains the age of 70 years, whichever is earlier.

Eligibility

The member is eligible for the Authorisation for Assignment (‘AFA’), if he satisfies the following
conditions:

- registration with IBBI;

- fit and proper person in terms of explanation to clause (g) of regulation 4 of IP regulations;
 - not in employment;
- not debarred by any direction/order of the agency/Board;
- has not attained the age of 70 years;
- no DC proceedings pending against IP before agency/Board; and
- complies with requirements of agency and the Board, w.r.t payment of fees, filings and
disclosures, CPE, other requirements stipulated under the Code, regulations, circulars,
directions or guidelines.

The application for issue/renewal of AFA shall be in such form, manner and with such fee, as may be
specified by Insolvency Professional Agency.

2) Not to engage in employment while holding Authorisation for Assignment

An insolvency professional shall not engage in any employment when he holds an AFA. This would
enable an individual to seek registration as insolvency professional even when he is in
employment. He must, however, discontinue employment when he wishes to have an Authorisation
for Assignment. He may surrender Authorisation for Assignment when he wishes to take up
employment.

3) Substitution of temporary surrender of professional membership by surrender of

authorisation for assignment

Regulation 10(1) of IP regulations and Regulation 26 of Model Bye Laws and GB of IPA Regulations
relating to temporary surrender of professional membership has been substituted by surrender of
Authorisation For Assignment.

4) Amendments relating to “conflict of interest” matters

The new insertions in the Code of Conduct for Insolvency Professionals are as follows:

a) Where an IP has conducted a corporate insolvency resolution process, he and his relatives shall
not accept any employment, (other than an employment secured through open competitive
recruitment), or render professional services, other than services under the Code;

• to a creditor having more than ten percent voting power,

• the successful resolution applicant,
• the corporate debtor or
• any of their related parties,

until a period of one year has elapsed from the date of his cessation from such process.

b) An insolvency professional shall not engage or appoint any of his relatives or related parties,
for or in connection with any work relating to any of his assignment.
 c) An insolvency professional shall not provide any service for or in connection with the
assignment which is being undertaken by any of his relatives or related parties.

d) An IP must disclose his details of any conflict of interests to the stakeholders, whenever he
comes across such conflict of interest during an assignment.

However, “related party” shall have the same meaning as assigned to it in clause (24A) of section
5, but does not include an insolvency professional entity of which the insolvency professional is
a partner or director.

The amended regulations are effective from 23rd July, 2019.

Regards,
Team ICSI IIP