Take the hassle out of ensuring your checklists and document packs are new-Rules-compliant

Have you updated your checklists and document packs in time for the introduction of the new Scottish Insolvency Rules on 6 April 2019?

Our new-Rules-compliant standard documents are available to order now, for delivery early/mid March, ready for the new legislation commencement date.

As we have been highlighting on our New Rules courses, there are process changes to Court Liquidation (SWUC) Creditors and Members Voluntary Liquidation (SCVL and SMVL) and Administration (SADM).

Some of the changes to SCVL and SMVL will ensure that the process in Scotland now mirrors the England & Wales Rules, but crucially, the remuneration approval process in Scotland for insolvency liquidations, and to an extent SADM, is not changing in structure, although there are amendments to how it will apply. There are myriad other changes that will need to be incorporated into your checklists and document packs.

We can supply checklist and document packs to support the revised Scottish statutory processes.

We have revised the structure of our document packs to reflect that the liquidation post appointment process will be broadly identical.  Prices are as follows:

Procedure Checklist Document Pack Combined
SWUC 750 750 1,500
SCVL 750 750 1,500
SMVL 750 750 1,500
Liquidation Generic 750 750
SADM 750 1,500 2,250

If you want to purchase just one liquidation pack, say SCVL, you would purchase the checklist, the specific document pack and the generic Liquidation pack, at a total of £2,250. If you were intending to purchase SCVL and SWUC, then you purchase the two specific checklists and packs, and the generic liquidation pack to support both procedures, at a combined cost of £3,750.

Purchase of three or more packs attracts a discount.

If you or your colleagues attended or wish to purchase our New Rules webinar, the cost of that attendance to a maximum of 5 participants and £250 (net) is redeemable against the purchase of any of the above checklists or document packs.

Contact us at enquiries@insolvencysupportservices.com or on 0845 6017570.

New Scottish Insolvency Rules 2018

Thanks to everyone who attended the first of our New Rules training courses in Glasgow on 16 January. Great to see so many of you, and thanks for such positive feedback on the course. Out of an overall score of 5, this course scored 4.69!

Testimonies include: “ very informative training session / well presented” and “the content is brilliant”.

We have also taken on board your feedback about the amount of content – for which thanks – and will adjust that for courses going forward.

There is still an opportunity to book for the Edinburgh course on 22 January, and booking is open for Aberdeen, Manchester and London. Alternatively we still have half days slots available for in-house team training.

Contact courses@insolvencysupportservices or for more details click here

INSOLVENCY (SCOTLAND) RULES 2018

The new Insolvency (Scotland) Rules 2018 are finally here!
Due to commence on 6 April 2019, now is the time for familiarisation, planning and preparation. Here’s how we can assist you.

ICAS Insolvency and Restructuring Conference 2018

Insolvency Support Services director Eileen Maclean is delighted to have been invited to join a superb line-up of speakers at the ICAS Insolvency and Restructuring Conference 2018 at Gleneagles on 13 and14 November. The theme of this year’s conference is A Profession in the Spotlight, which ICAS has chosen to reflect the increasing levels of scrutiny faced by our profession.

For more info and to book: https://www.icas.com/events/the-icas-insolvency-and-restructuring-conference-2018

If you’re going too, Eileen hopes to catch up with you there.

Common Financial Tool (Scotland) Regulations 2018 – Giving evidence to Parliament

Eileen Maclean, R3 Scottish Technical Committee member, gave evidence to the Scottish Parliament Economy, Jobs and Fair Work Committee, on the new Common Financial Tool (Scotland) Regulations 2018 on 30 October.

Eileen said: “It was a privilege to be asked to give evidence on behalf of the profession. Now we await the Committee’s recommendation, with interest.”

You can watch the session here: https://www.scottishparliament.tv/meeting/economy-energy-and-fair-work-committee-part-i-october-30-2018

 

Lifting the corporate veil

It seems that the protection afforded by Limited Liability has received a body blow in the Budget with an announcement that directors may face personal liability for their company’s tax liabilities:

“Tax abuse and insolvency – Following Royal Assent of Finance Bill 2019-20, directors and other persons involved in tax avoidance, evasion or phoenixism will be jointly and severally liable for company tax liabilities, where there is a risk that the company may deliberately enter insolvency. (69)”

The language is perhaps a little confused. Insolvency is, after all, a measurable financial position, defined in statute with reference to two established tests, so not something that is “deliberately” entered, per se. It’s also not entirely clear which company is being referred to – the one with the liabilities or the successor. At a guess, the provisions are aiming at behaviours that cause or contribute to the insolvency of a company, but viewed with hindsight of an insolvency proceeding.

But leaving aside the semantics, there could be some significant and tangible impacts for business owners looking to avail themselves of the entrepreneurial encouragement to “have another go” that Limited Liability is intended to afford. Whilst there is no great surprise that tax evaders should be targeted, interestingly, both avoidance and phoenixism (like them or not – both currently legal practices), appear to be encompassed also.

We will have to await further details before the impact of this on the advice provided to directors of insolvent companies can be fully assessed. However, if the trigger for personal liability is the act of starting again (i.e. phoenixing), these provisions may have the unintended consequence of discouraging business restarts at a time when the economy is likely to be sorely in need of them. They may also impact the saleability of distressed assets, where often a connected party is the only interested purchaser. If such a purchase risks the imposition of personal liability for the debts of the predecessor company, the well-advised might reasonably look to buy their stock and fixtures and fittings elsewhere, or at the very least, be willing to pay rather less for them!

Alison Curry
Director, Insolvency Support Services 

Anti-Money Laundering – Have you assessed the risks?

A step-by-step explanation of a firm’s responsibilities under anti-money laundering regulations.

For many insolvency practitioners, anti-money laundering (AML) compliance starts and finishes with client identification procedures. But that simply isn’t sufficient to comply with current legislative requirements, nor to adequately protect you from becoming a professional enabler – a title none of us relish acquiring!

The area is under increasing regulatory scrutiny as the Recognised Professional Bodies (your AML supervisors) now have their own oversight regulator, the Office for Professional Body Anti-Money Laundering Supervisions (OPBAS), breathing down their necks. We IPs are likely to come under closer scrutiny from our AML supervisors, with a renewed focus on meaningful AML compliance.

So, aside from Customer Due Diligence (CDD) procedures, what do you need to do?

What are the risks faced by IPs?

Money laundering and terrorist financing are significant threats to any economy, particularly those operating globally. The UK is the world’s sixth largest economy, of which our financial services sector is a key component.

HM Treasury’s 2015 National Risk Assessment judged accountancy services to be at high risk of money laundering exploitation. The Treasury re-affirmed that view in 2017, concluding that ‘the inherent risks and vulnerabilities of accountancy services remain, due to the value of these services to those engaging in high-end money laundering… Company liquidation and associated services (including insolvency practice, which may be conducted by certain accountancy professionals) also pose a risk of criminals masking the audit trail of money laundered through a company and transferring the proceeds of crime…’.

Firm-wide risk assessment

First and foremost you must have a documented firm-wide risk assessment in place. This is a mandatory requirement under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR17), placed upon all ‘relevant persons’ (which includes IPs) and your supervisor may ask for sight of it at any time. Your risk assessment should:

  • identify the risk factors that apply specifically to your business and the way in which it operates
  • consider the frequency of occurrence of these risks, as well as their potential severity
  • explain how these risks are adequately managed and mitigated by the processes and procedures employed by your firm
  • be reviewed periodically and updated with new service lines and operational models
    used to educate and inform your staff

If you don’t know where to start or are pressed for time, ISS can assist you.

Oversight

Secondly, you need to consider who within your practice is going to take responsibility for production, operational oversight and periodic review of your policies, controls and procedures and whether this is going to be a formal compliance officer role, or an informal or shared function. Depending on the size and nature of your practice, either route may be appropriate. The key requirement is that someone (individual or group) needs to oversee this area. This is not the same function as the traditional money laundering reporting officer role, although these may be combined, if that works best for your firm.

Policies, controls and procedures

Regulation 19 of the MLR17 requires you to establish and maintain policies, controls and procedures to effectively mitigate and manage the risks of money laundering and terrorist financing identified in any risk assessment undertaken by the relevant person. These must be maintained in writing and must include:

  • risk management practices
  • internal controls
  • customer due diligence
  • reliance and record keeping
  • the monitoring and management of compliance with, and the internal communication of, such policies, controls and procedures

Do you have these policies in place? If not, we can help.

CPD and staff training

Those responsible for AML oversight must receive appropriate CPD on the conduct of their functions. Additionally, your whole team should be provided with periodic training, not just about the law in this area, but also about the specific risks presented to your business and the policies, controls and procedures that your firm has in place.

ISS can supply in-house and/or online learning modules for your officers and your team members, specifically tailored for your business and the risks it faces.

Beneficial owner and manager approval

It is a criminal offence for a person to act in the capacity of a beneficial owner, officer or manager of a relevant firm without the approval of an AML supervisor. Have all relevant owners and managers of your practice registered with your AML supervisor yet?

This requirement extends to any party with a controlling interest in the business (eg a shareholding in excess of 25%) and any principal, senior manager, or member of a management committee who is responsible for setting, approving or ensuring the firm’s compliance with the firm’s anti-money laundering policies and procedures.

 

We will be examining the legal requirements and the risks presented to practices in our forthcoming Intensive CPD / CPE Catch-Up Courses and discussing how practices may manage these.

For further information about how ISS may assist you in meeting your AML obligations, contact enquiries@insolvencysupportservices.com

R3 in Scotland Breakfast Seminar: An Insolvency Practitioner’s Duties and Obligations

Insolvency Support Services (ISS) is delighted to sponsor the upcoming R3 in Scotland Breakfast Seminar on An Insolvency Practitioner’s Duties and Obligations: a look at Doonin Plant vs SEPA.

The excellent panel of speakers comprises Kirsten Fleming and Tim Cooper from Addleshaw Goddard and Alison York, Head of Legal at the Scottish Environment Protection Agency (SEPA).

R3 President, Stuart Frith, will also give an update on behalf of R3.

When: Friday 30 November 2018, 08:00 until 10:00
Where: Addleshaw Goddard LLP, 19 Canning Street , Edinburgh EH3 8EH

We look forward to catching up with you for an excellent breakfast seminar!

To book, please click here.

A Privacy Policy is not just for your website

An Insolvency Support Services (ISS) survey of 70 insolvency practitioners’ websites has revealed that only 25% contain any information about the rights of the various parties an insolvency practitioner will routinely process data about during the course of an insolvency engagement: debtors, directors, creditors, employees and other stakeholders.

While 80% of websites contained a privacy policy of sorts, 68% of these privacy policies related only to visitors’ use of the website and information collected about their website usage through cookies.

Most policies were found to be lengthy, generic templates which failed to adopt the “layering” approach recommended by the Information Commissioner’s Office. In one case, the privacy policy was labelled “US” and failed to mention the GDPR regulations at all!

Only 13% of the websites surveyed sought express permission for cookies and explained both the privacy policy in relation to the website and in relation to data held by the practice in connection with insolvency appointments.

Alison Curry, a director of ISS, commented: “These findings might not mean that practitioners are falling down in their GDPR obligations. They may be supplying the necessary information within privacy notices that are distributed by email or in hard copy during the course of insolvency proceedings. However, even if that is the case, these firms are missing an opportunity to make this information readily available at nominal additional cost and inconvenience, by placing it on their website. Of more concern would be if practitioners are failing to provide the relevant data subjects with an appropriate privacy notice, explaining their rights, the insolvency practitioner’s lawful basis for processing and the retention and destruction policies adopted by the practice.”

Do you have all the GDPR documentation that your firm needs in order to comply fully with the new legislation, both online and offline? ISS can assist you with insolvency-specific, layered, GDPR documents; including a full suite of policies, procedures and notices, which can be easily customised for use in your firm.

Was your firm surveyed? If you would like to know if yours was one of the firms surveyed, please get in touch for a no-obligation chat about our findings.

For further details, call 0845 6017570 or email enquiries@insolvencysupportservices.com

Research note:

Insolvency Support Services’ review surveyed the websites of 70 insolvency practitioners in London and South East England at the end of September 2018. Our main objective was to assess the extent to which insolvency practitioners’ have published a privacy policy on their website that satisfies GDPR requirements some four months after the new legislation came into force.

Intensive Insolvency CPD / CPE Catch Up Course

Looking to catch up on your CPD? It’s that time of year when we submit our licence applications and sign off that we have fulfilled our CPD obligations.

Join fellow professionals and the ISS Training team for an intensive two days and 12 hours of CPD / CPE in advance of your annual licence renewal.  It is only £495 plus VAT for the two days.

This course will cover key compliance areas for all insolvency professionals and provide optional streams to cater for the types of work your practice undertakes.  Choose the stream that suits your business and development need.  Delivered in a group, interactive format, you will have an opportunity to discuss with peers the issues you’ve encountered in practice and pick the brains of our compliance experts, Eileen Maclean and Alison Curry.

CPD Learning Outcomes

  • Clear and concise guidance to legislative and regulatory requirements governing each area
  • An opportunity to discuss current issues and best practice with fellow professionals
  • 12 hours of bespoke and relevant CPD/CPE to support your annual license renewal

Who should attend

This course is aimed at licenced Insolvency Practitioners and their staff, who are looking for a comprehensive introduction to the subject matter or an update to their technical knowledge and skills.

Speakers

Eileen Maclean MA Hons MIPA MABRP MBA, director of Insolvency Support Services Limited

Alison Curry LLB Hons MIPA, director of Insolvency Support Services Limited

Location and Date

Manchester, 21/22 November, 9.30am to 5.00pm

London, 5/6 December, 9.30am to 5.00pm

Cost

Half day course: £155 + VAT
Full day course: £295 + VAT
All four half day courses: just £495 + VAT

Fees include all course documentation, lunch and light refreshments

CPD

3-12 hours depending on modules attended

Course Outline

Day 1

Session 1: Know Your Customer:  Systems & Procedures Workshop
How you can improve your firm’s KYC in a cost effective and proportionate way to manage the risks presented by conflicts of interest and the AML regime.

Session 2: SIPs Update
Refresh your knowledge of these key regulatory requirements.

Session 3:
Choose from:

Option A: Current issues in IVAs
Join Alison for an examination of the current regulatory focus and developments in IVA practice.

Or 

Option B: Current issues in MVL
Eileen presents an overview of the particular risks incumbent in MVL work and how these can be effectively managed.

Day 2

Session 1: Understanding Vulnerability
Vulnerability, and particularly the impact of mental health problems, has never been higher profile. Consider what adjustments your business operations require, to assist your clients and avoid adverse PR.

Session 2:
Choose from:

Option A: Bankruptcy Update
Alison leads the discussion on how practice within the Official Receivers is developing and examines the real impacts of bankruptcy on those you assist with their debt situation.

Or

Option B: Sectoral Challenges
With retail failure seldom out of the news, the hospitality sector struggling to recover its footing and the construction industry facing faltering house prices, Eileen will look at some sector-specific challenges faced by UK businesses and the owners and creditors you advise.

Session 3: Data Privacy Workshop
Data privacy cuts across all areas of practice management. Understand what steps you need to take, both as an insolvency professional and as a business person.