IBBI to Simplify CIRP Forms by Insolvency Professionals, releases Discussion Paper [Read Order]

In a bid to streamline the compliance process for Insolvency Professionals ( IPs ), the Insolvency and Bankruptcy Board of India ( IBBI ) has proposed significant changes to the Compliance Reporting Framework under the Corporate Insolvency Resolution Process ( CIRP ).

IBBI has released a discussion paper proposing ways to simplify and improve CIRP forms.  The new measures aim to reduce the compliance burden, eliminate duplication, and make the reporting process more efficient.

One of the most significant changes is the move to a monthly compliance reporting framework. Under the current system, the timelines for filing various CIRP forms are linked to different events, such as the insolvency commencement date, public announcement, and appointment of the Resolution Professional (RP). This leads to multiple due dates for an IP handling several CIRP assignments, making the filing process cumbersome.

To address this, the new proposal suggests that IPs report the status and progress of the CIRP as of the last day of every month. The applicable forms will need to be filed by the 10th day of the following month. This change will allow IPs to plan their compliances more efficiently and submit all forms for their cases in one go every month. For instance, an IP handling three CIRP cases with different insolvency commencement dates in January would file Form CIRP-1 for all three cases by 10th February, reflecting the status as of 31st January.

Consolidation of Compliance Requirements

The proposal also aims to consolidate various compliance obligations, such as the disclosure of costs and relationships, onto the centralised IBBI platform. This will simplify the process and enhance accessibility and oversight, facilitating smoother regulatory operations.

Proposed Form Changes

Several existing forms are proposed to be revamped, merged, or dropped entirely:

IP-1: Proposed to be dropped as relevant details are submitted in the assignment portal and other compliances.

CIRP-1 and CIRP-2: To be merged into a single form CP-1.

CIRP-3 and CIRP-4: To be merged into CP-2.

CIRP-5: Completely revamped and divided into two forms: CP-3A and CP-3B.

CIRP-6: Proposed to be dropped as relevant details are captured in other forms.

CIRP-7: Revamped into CP-5, a simplified form with minimal fields to be submitted at the end of every month.

CIRP-8: Revamped into CP-4, capturing details of avoidance transactions reported to AA by the RP.

Implementation and Impact

These proposed changes are expected to reduce the time and effort required for compliance by IPs, while ensuring that IBBI receives relevant and timely information for effective monitoring of the CIRP. The new framework will help IPs manage their compliances more efficiently and provide a single-window interface for fulfilling their reporting obligations.

To Read the full text of the Order CLICK HERE

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