Insolvency Professionals (IPs), who are the backbone of the Insolvency and Bankruptcy Code (IBC), may soon get significant compliance relief with the insolvency regulator Insolvency and Bankruptcy Board of India (IBBI) proposing to simplify and optimise various Corporate insolvency-related forms besides streamlining reporting requirements.

IBBI has now come up with a discussion paper -- ‘Reducing Compliance by Review of CIRP Forms Submitted by IPs to IBBI’. Public comments on the proposals in the discussion paper have to be submitted by July 1, IBBI said. 

The discussion paper follows the Financial Stability and Development Council’s (FSDC) advice from its May 2023 meeting. 

FSDC had then urged regulators to adopt a focused approach to reduce the compliance burden and create a streamlined, efficient regulatory environment.

Main proposal 

The reform initiative seeks to reduce the amount of information and data that IPs currently need to submit, with a special emphasis on removing duplication, making the reporting process simpler and more efficient.

It seeks to adjust compliance deadlines to reduce the pressure caused by numerous and frequently overlapping submission dates, allowing IPs to manage their resources more effectively.

Insolvency and Bankruptcy Board of India (IBBI) also plans to simplify the compliance process by combining various reporting systems on IPA and IBBI website into a single, centralised IBBI website, eliminating duplication, and making it easier for stakeholders to access and use.

The latest IBBI initiative is expected to significantly mitigate the compliance burden faced by IPs. It underscores the commitment to fostering a regulatory environment that is not only robust but also responsive to the evolving needs of stakeholders, according to discussion paper.

Expert take 

Hari Hara Mishra, CEO, Association of ARCs in India, said that the discussion paper on reducing compliance burden on Insolvency Professionals is a good initiative to avoid duplications, and streamline reporting requirements. “Less burden on reporting and compliance aspects will facilitate more efficient and productive use of the resources “, he said.

Durgesh Khanapurkar, Partner, Desai & Diwanji, said that the proposed reforms will certainly reduce the procedural burden on the IPs and will enable them to devote more time towards the corporate insolvency process and other substantive aspects of the IBC. 

“It will also enable them to use their resources more effectively. Secondly by adjusting the deadlines to a monthly compliance reporting framework, the IBBI endeavours to end the cumbersome process of filings linked to various events”, he said.

Anjali Jain, Partner at Areness, a law firm, said these initiatives would ease burden compliance on IPs as certain forms have been merged to seek more consolidated information and various other forms demanding duplicate information have been proposed to be dropped. 

The duplicate information or redundant compliances being sought from Insolvency Professionals (IPs) at various stages have been streamlined through consolidation or removal of various compliance forms, she said. 

Furthermore, the reporting mandate on process updates is intended to be simplified and precise as timeline specific compliances have been proposed to be substituted with monthly reporting compliance framework, Jain added.