Insolvency Practitioners Handbook, its contents and the JIEB

Unlike Butterworths, this book may not be brought into the examination. The information within will need to be learnt for the exam.

The contents of the handbook are as follows:

The Ethics Code
SIPs
Technical Releases
Insolvency Guidance Papers
IPA Technical Helpsheets
Personal Debtors
Other Profession Regulations and Guidance

I have explained below how I believe you should approach learning each of the areas and how this fits into each JIEB paper.

ETHICS

Understanding of the fundamental principles, the framework approach, appropriate safeguards and the application of the framework approach to specific situations needs to be learnt. I would suggest reviewing Liquidations paper 2008 Qu 1, which required an in-depth knowledge of the Code of Ethics.

The IPA has also issued a guidance note on the meaning of transparency and confidentiality within the code of ethics. I would read this, but not necessarily learn its content, as a similar guidance note has not been issued by the other regulatory bodies.

SIPs & Technical Releases
I would suggest reading my earlier blog which covers all the SIPs and how to approach learning them.

INSOLVENCY GUIDANCE PAPER

These papers have been issued jointly with all the RPBs and again need to be learnt.

Control of Cases
This paper is short, but a 6 mark question occurred in 2007 2(a)(i) on this topic, so it is worth creating a small mind-map.

Succession Planning
This is very topical since it occurred in both the Liquidation 2011 Qu 3 and Administrations 2011 Qu4(a) papers. I do not try to guess or predict what will come up in exam papers; just because this occurred twice in 2011 as far as I am concerned does not preclude it being in the 2013 papers. This is a “must do” mind-map.

The Family Home
If you are not sitting the personal paper this year then you may leave this, but it is rare when there is not a question in one format or another about the matrimonial home within the personal JIEB paper, and knowing the contents of the guidance paper may just help increase any holistic marks you may be awarded.

Systems for Control of Accounting and other Business Records
This guidance note is more general than SIP 17, requiring IPs to have systems in place to monitor and manage the books and records they collect, and also specifically refers to records in electronic form.

Dealing with Complaints
Were you aware there was a guidance note on this topic? Do you understand how a firm’s professional Indemnity insurance (PII) may effect how a complaint is dealt with? If these are not areas you are familiar with, after creating your mind-map speak to the person in your firm who deals with PII claims and complaints.

TECHNICAL HELPSHEETS

The IPA has issued helpsheets to help firms be compliant with the rules, regulations and SIPS and these are used by your compliance manager to conduct reviews on cases where the IP is licensed by the IPA. The helpsheets are split between case type and date of appointment and there is also a checklist of essential facts.

I would suggest creating a mind-map of the checklist of essential facts as this will help in any question about what needs to be dealt with upon appointment, to progress a case and to close a case.

In respect of the technical helpsheets, you might find it useful to read the relevant rule or section as you are reviewing them and if you come across a reference to Dear IP, make a note and add it to your general mind-map of topic areas.

PERSONAL DEBTORS

If you are not studying for the personal paper this year, you may skip this section.

IVA Protocol
The IVA protocol was created to facilitate the efficient handling of consumer IVAs. This has meant that stakeholder (credit card companies and banks) have had a large input into agreeing the format of a consumer IVA proposal, allowing creditors to agree to proposals without extensive modifications.

Since you will need to be familiar with what should go into a proposal, I would suggest reviewing the protocol, the R3 IVA standard terms and conditions (a new set are shortly to be issued by R3 so don’t tackle this until March or April 2013) and R 5.3. Why do you need to know the difference? If you are given an options question and the debtor has only consumer credit debt, you need to know the criteria to determine whether or not this is an option.

OFT Debt Management Guidance
All IPs are required to have a consumer credit licence. If you do not do many IVAs then you may, if you are licensed by ACCA or ICAEW, be covered by the group consumer credit licence held by these two RPBs. If, however, you are dealing with many IVAs or are licensed by the IPA, then you will need to make an application to the OFT. In any event all IPs who deal with giving advice to individuals need to abide by the OFT guidance. So you need to be aware of the contents of this guidance paper.

In Debt Guide
This paper is detailed and gives a great amount of information which would help you to answer an options question on the personal paper. The paper covers: negotiated agreements with creditors, Debt reorganisation/consolidation of loan, Debt Management Plan, County Court Administration order, IVA, Debt Relief Order and Bankruptcy. Anything you are missing may be found in the answer to 2011 Qu 2.

OTHER PROFESSION REGULATIONS AND GUIDANCE
This final set of guidance papers apart from R3 Money Laundering, is specific to the IPA. However, the other regulatory bodies have issued guidance for these areas and the actual requirements vary between RPBs.

Professional Indemnity Insurance Regulations & IPA Professional Indemnity Insurance
You need to be clear in your understanding between the need for a bond and the need for professional indemnity insurance. The need to have a bond in place is a statutory matter detailed in Insolvency Practitioners Regulations 2005 Schedule 2 Part 2. The need to have professional indemnity insurance in place is not a statutory matter but a licensing one and is dictated by each RPB. I would create 2 mind-maps; one for PII, and one for Bonding to help differentiate the two requirements.

R3 Money Laundering Guidance
Understanding the Money Laundering Regulations, what a relevant business/regulated sector is/are, what an IP must do and offences there are is a must. Liquidations 2005 Qu 1 was a 20 mark question covering this area, and with the introduction of the Bribery Act, this seems to be an area that may be tested on.

IPA Client Money Regulations & IPA Client Money Guidance
I would suggest reading and creating a mind-map of the key issues. I would also suggest reading SIP 11 and trying to understand how these guidance papers and SIP 11 fit together.

IPA Continuing Professional Education Guidance
I suggest you read this guidance note and Insolvency Practitioners Regulations 2005 Section 8 & 8A, understanding how the regulatory and licensing requirements of RPBs fit together.

I would suggest tackling this in stages, maybe trying to complete a mind-map on one topic a week.