Categories: Insolvency

Reducing Compliance by Review of CIRP Forms

IBBI issued a discussion paper for Reducing Compliance by Review of CIRP Forms

The Insolvency and Bankruptcy Board of India (IBBI), following the guidance from the Financial Stability and Development Council (FSDC) in its 27th meeting on May 8, 2023, has initiated steps to streamline the compliance requirements for Insolvency Professionals (IPs) under the Corporate Insolvency Resolution Process (CIRP). On June 10, 2024, IBBI issued a discussion paper proposing significant changes aimed at reducing the compliance burden on IPs.

The proposed changes to CIRP forms are expected to significantly reduce the compliance burden on Insolvency Professionals by eliminating redundant forms, merging existing ones, and simplifying the reporting process. The IBBI seeks feedback from stakeholders to ensure these changes effectively streamline the regulatory environment and enhance the efficiency of the CIRP process.

Objectives of the Proposed Changes

The primary objectives outlined in the discussion paper are to:

  • Reduce the amount of information and data that IPs need to submit.
  • Eliminate duplication of efforts in the reporting process.
  • Simplify and streamline compliance deadlines to reduce pressure on IPs.
  • Centralize various reporting systems on a single IBBI website for ease of access and use.

Proposed Changes to CIRP Forms

The proposed changes to the CIRP forms aim to reduce redundancy, simplify reporting, and align submission timelines. The summary of proposed changes is as follows:

Existing and Proposed Forms

The proposed changes include revamping existing forms, merging some forms, and eliminating others to simplify the reporting process. The detailed changes are as follows:

Existing Forms Proposed Forms Description
IP-1 Dropped Relevant details are submitted in the assignment portal and other compliances.
CIRP-1 & CIRP-2 Merged into CP-1 A single form to be filled after the constitution of the Committee of Creditors (CoC).
CIRP-3 & CIRP-4 Merged into CP-2 A single form to be filled after the issue of the Request for Resolution Plans (RFRP).
CIRP-5 Revamped into CP-3A & CP-3B CP-3A captures details of the application filed with AA, CP-3B captures details of AA’s order.
CIRP-6 Dropped Relevant details are captured in other forms.
CIRP-7 Revamped into CP-5 A simplified form to be submitted at the end of every month, capturing status, delays, and updates.
CIRP-8 Revamped into CP-4 Revised to capture details of avoidance transactions reported to AA by the Resolution Professional (RP).

Monthly Reporting Cycle

A significant change is the shift to a monthly compliance reporting framework. IPs will be required to report the status and progress of the CIRP as of the last day of every month, with the applicable forms filed by the 10th day of the following month. This change aims to:

  • Streamline the reporting process.
  • Reduce the complexity associated with multiple due dates.
  • Allow IPs to manage their resources more effectively.

Centralized Reporting System

To further simplify the compliance process, the discussion paper proposes combining various reporting systems into a single, centralized IBBI website. This integration will:

  • Eliminate duplication.
  • Make it easier for stakeholders to access and use the system.
  • Ensure that IBBI receives relevant and timely information for effective monitoring of the CIRP.

Timelines for Filing Forms

A shift to a monthly compliance reporting framework is proposed, requiring IPs to report the status and progress of the CIRP as of the last day of every month. The applicable forms must be filed by the 10th day of the following month, except for CP-3B. This change aims to reduce the complexity of tracking various due dates currently linked to different events in the CIRP process.

Key Changes Proposed in Filing CIRP Reporting Forms

The proposed changes are expected to make the compliance process less time-consuming and less resource-intensive for IPs. Streamlined forms and centralized reporting will enhance the efficiency of the compliance process. Ensuring that IBBI receives relevant and timely information will aid in the effective monitoring of the CIRP.

  1. Monthly Compliance Reporting Framework:
    • The IBBI has proposed shifting to a monthly compliance reporting framework. Insolvency Professionals would report the status and progress of the Corporate Insolvency Resolution Process (CIRP) as of the last day of every month.
    • The applicable forms must be filed by the 10th day of the following month. This move aims to reduce the complexity and burden associated with multiple and frequently overlapping submission deadlines, allowing IPs to manage their resources more effectively.
  2. Reduction of Duplication:
    • The proposed changes emphasize removing duplication in the compliance process.For example, forms that capture similar data or information currently being submitted through different channels will be streamlined or merged.
  3. Streamlining Reporting Processes:
    • Several forms are proposed to be merged or revamped to simplify reporting requirements.The merging of forms such as CIRP-1 and CIRP-2 into CP-1, and CIRP-3 and CIRP-4 into CP-2, aims to reduce the number of forms IPs need to fill.
    • Introduction of new forms like CP-3A and CP-3B to capture specific details more efficiently.
  4. Centralized Reporting System:
    • The IBBI proposes integrating various reporting systems from the websites of insolvency professional agencies into a single, centralized IBBI website.
    • This centralization aims to eliminate duplication and make it easier for stakeholders to access and use the system.
  5. Simplified Compliance Process:
    • By simplifying forms and combining multiple reporting requirements, the IBBI aims to reduce the time and effort required by IPs to meet compliance obligations.
    • The use of auto-population of data from existing sources will also contribute to a more efficient compliance process.

Study Group Report

The Indian Institute of Insolvency Professionals of ICAI constituted a Study Group on ‘Removing Duplicity and Redundancy in Compliances by IPs’. The group, consisting of 10 members from all three Insolvency Professional Agencies (IPAs), was tasked with making recommendations to alleviate the compliance burden faced by IPs. The Study Group has recently submitted its draft report to IBBI.

How to Post Comments

The Board is soliciting comments on the proposed changes and CIRP forms detailed in Annexure I. Comments can be submitted electronically by July 1, 2024, following these steps:

  1. Visit the IBBI website at www.ibbi.gov.in.
  2. Select ‘Public Comments’.
  3. Select ‘Discussion paper on Reducing Compliance by Review of CIRP Forms submitted by Insolvency Professionals (IPs) to IBBI’.
  4. Provide your Name and Email ID.
  5. Select the stakeholder category from the options provided.
  6. Choose the type of comments you wish to make: General Comments or Specific Comments.
    • For General Comments, select the relevant option (Inconsistency between Forms or Difficulty in Filling Information).
    • For Specific Comments, select the specific form and provide comments.
  7. You can comment on more than one form by repeating the process.
  8. Click ‘Submit’ when you have no more comments to make.

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Tags: CIRP
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