Insolvency regulator IBBI has revoked as many as seven circulars after undertaking a review of the circulars issued by it since the enactment of the Insolvency and Bankruptcy Code (IBC) in 2016.
It was observed that certain circulars are no longer required on account of already being provided in the Corporate Insolvency Resolution Process (CIRP) regulations, or in the insolvency professional regulations, the Insolvency and Bankruptcy Board of India (IBBI) said in a circular.
The circulars that have now been revoked include those related to confidentiality of information relating to processes under IBC; appointment of authorised representative for classes of creditors; notice for meetings of committee of creditors; voting in the committee of creditors; and retention of records relating to CIRP.
Circular redundancy
Amit Jajoo, Partner, IndusLaw, noted that the IBBI issues various circulars from time-to-time to clarify or elaborate upon certain provisions of the IBC. This stems from its obligations under Section 196 of the code to set guidelines, regulation standards, etc.
“As we have witnessed, IBC has been a evolving legislation which has constantly progressed from its inception through various amendments. In view of the subsequent amendments to the code, some of the circulars issued by IBBI have become redundant. Therefore, it has reviewed the prevailing circulars and rescinded the ones that are no longer required,” he added.
‘Increased efficiency’
Neeraj Prakash, Partner, Chadha & Co, said that the latest IBBI move is a welcome step towards removing the multiplicity of regulations and directions to be complied with during insolvency proceedings.
“It will also ensure that resolution professionals do not need to refer to multiple circulars and provisions on the same issue, thereby bringing increased efficiency in their functioning,” Prakash added.