• 2 2 Insolvency Practitioners

    • 2.1 2.1 Registration of Insolvency Practitioners

      • 2.1.1 Register of Approved Insolvency Practitioners

        1) The CRO will maintain the register of Insolvency Practitioners by recording the following information in respect of current and former registered Insolvency Practitioners:
        (A) full name;
        (B) address;
        (C) date of registration as a registered Insolvency Practitioner with the CRO;
        (D) if applicable, date of registration as an Official Liquidator; and
        (E) date of cessation of registration as an Insolvency Practitioner with the CRO.

      • 2.1.2 Application for registration

        1) An Insolvency Practitioner applying to be entered onto the register of Insolvency Practitioners maintained by the CRO must:
        (A) complete the Prescribed Form in Appendix 1 and file it with the CRO;
        (B) provide such additional information and/or documents as may be required by the CRO; and
        (C) pay the Prescribed Fee stated in Appendix 2 to the CRO.
        2) Before the CRO approves an Insolvency Practitioner to appear on the register, an applicant must satisfy the CRO that:
        (A) the applicant is fit and proper within the meaning of Rule 2.1.3;
        (B) the applicant holds adequate security within the meaning of Rule 2.1.3A; and
        (C) the applicant meets any other requirements prescribed by the CRO or the QFC Authority.
        Amended (as from 6th June 2017).

      • 2.1.3 Fit and proper

        1) The matters to be taken into account by the CRO in deciding whether an applicant is a fit and proper person to be registered as an Insolvency Practitioner shall include:
        (A) the applicant's:
        i) qualifications;
        ii) experience;
        iii) membership of appropriate professional bodies; and
        iv) available resources;
        (B) the identity of the applicant's firm; and
        (C) any other information required by the CRO.
        2) An applicant will meet the criteria in (1) if the applicant is:
        (A) licensed to act as an Insolvency Practitioner in a jurisdiction acceptable to the CRO; and
        (B) in good standing with the body responsible for the licensing of insolvency practitioners in that jurisdiction.

      • 2.1.3A Security — General

        (1) For the purposes of Article 185(2) of the Insolvency Regulations, a person satisfies the requirement to hold adequate security if the person has either:
        (A) adequate and appropriate professional indemnity insurance and adequate and appropriate fidelity insurance that are both acceptable to QFC Authority; or
        (B) the person provides a General and Specific Bond as set out in Rules 2.1.4 and 2.3.
        (2) For the purposes of Rule 2.1.3A(1)(A), such professional indemnity insurance and fidelity insurance must, for them to be adequate and appropriate, cover, as a minimum, the matters mentioned in Rules 2.1.4 and 2.3.
        Inserted (as from 6th June 2017).

      • 2.1.4 Security

        (1) A person satisfies the requirement to hold adequate security if the person provides a General Bond which contains provision whereby a surety undertakes to be jointly and severally liable for losses in relation to the insolvent caused by:
        (A) the fraud or dishonesty of the Insolvency Practitioner whether acting alone or in collusion with one or more persons; or
        (B) the fraud or dishonesty of any person committed with the actual or constructive knowledge of the Insolvency Practitioner; and
        (C) otherwise conforms to the requirements of this Rule.
        (2) The terms of the General Bond shall provide for the payment, in respect of each case where the Insolvency Practitioner acts, of claims in respect of liabilities for losses of the kind mentioned in sub-paragraph (1) above up to a sum of USD250,000 ("the General Penalty Sum"), in the event that the amounts payable under a relevant Specific Bond are insufficient to meet all claims arising out of any case.
        3) The terms of the General Bond may provide:
        (A) that total claims in respect of the acts of the Insolvency Practitioner under all bonds relating to the Insolvency Practitioner are to be limited to a maximum aggregate sum (which shall not be less than USD25,000,000); and
        (B) for a time limit within which claims must be made.
        Amended (as from 6th June 2017).

      • 2.1.5 Annual renewal

        1) An insolvency practitioner must pay the Prescribed Fee stated in Appendix 2 to remain on the register of approved Insolvency Practitioners.
        2) If, at any time after registration, an Insolvency Practitioner no longer meets the requirements for registration as an approved Insolvency Practitioner, the Insolvency Practitioner must immediately inform the CRO in writing.

      • 2.1.6 Commencement and transitional provisions

        (1) Subject to sub-clause (2) below, the registration of an Insolvency Practitioner prior to the date on which these Rules come into force shall not be invalidated by reason of the fact that the person does not meet the requirements contained in these Rules. However, such person must, before the end of a period of one year from the date on which these Rules come into force, re-register as an Insolvency Practitioner in accordance with these Rules, unless such person:
        (A) is al registered as an Insolvency Practitioner; and
        (B) meets the requirements contained in these Rules at the time these Rules come into force.
        (1A) Subject to meeting the requirements under the Insolvency Regulations and these Rules, an Insolvency Practitioner, who is registered, whether before or after the time these Rules come into force, may at any time, by an application to CRO, instead of providing a security in the form of:
        (A) a General and Specific Bond, provide such security in the form of insurance as provided in Rule 2.1.3A; or
        (B) an insurance as provided in Rule 2.1.3A, provide such security in the form of a General and Specific Bond,
        but in any event, no case on which the Insolvency Practitioner acts must be left without adequate security as stated in these Rules.
        (2) Registration of an Insolvency Practitioner prior to the commencement date will not entitle a person to registration on a new application for registration made after the commencement date if that person does not meet the requirements contained in these Rules.
        Amended (as from 6th June 2017).

    • 2.2 Registration as an Official Liquidator

      1) An Insolvency Practitioner registered under these Rules may apply to the CRO to be registered as an official Liquidator ("Official Liquidator").
      2) The CRO may register such Insolvency Practitioner as an Official Liquidator on such terms and for such period as it sees fit.
      3) In accordance with Article 184(3) of the Insolvency Regulations, registration of an Insolvency Practitioner as an Official Liquidator constitutes an acknowledgement that the Insolvency Practitioner will accept any appointment made by the QFC Court as a Liquidator or provisional Liquidator to a Company in accordance with the provisions of any rules of procedure as may be made by the QFC Court.

    • 2.3 2.3 Specific Bond

      • 2.3.1 Requirement to maintain a Specific Bond

        1) An Insolvency Practitioner must provide to the QFC Authority a Specific Bond in relation to each case in respect of which he is instructed.
        2) The terms of the Specific Bond must comply with Rule 2.3.2.

      • 2.3.2 Terms of the Specific Bond

        1) The Specific Bond must contain provisions whereby a surety undertakes to be jointly and severally liable for losses in relation to the insolvent caused by:
        (A) the fraud or dishonesty of the Insolvency Practitioner whether acting alone or in collusion with one or more persons; or
        (B) the fraud or dishonesty of any person committed with the actual or constructive knowledge of the Insolvency Practitioner; and
        (C) otherwise conforms to the requirements of this Rule.
        2) The terms of the Specific Bond must provide:
        (A) for the payment, in respect of each case where the Insolvency Practitioner acts, of claims in respect of liabilities for losses of the kind mentioned in sub-paragraph (1) up to an aggregate maximum sum in respect of that case ("the Specific Penalty Sum") calculated in accordance with the provisions of Rule 2.3.3;
        (B) for a schedule containing the name of the insolvent and the value of the insolvent's assets to be submitted to the surety or cautioner within such period as may be specified in the bond;
        (C) that if at any time before the Insolvency Practitioner obtains the release or discharge in respect of acting in relation to an insolvent, the Insolvency Practitioner forms the opinion that the value of that insolvent's assets is greater than the current specific penalty sum, a revised Specific Penalty Sum shall be applicable on the submission within such time as may be specified in the bond of a cover schedule containing a revised value of the insolvent's assets; and
        (D) for the payment of losses of the kind mentioned in sub-paragraph (1), whether they arise during the period in which the Insolvency Practitioner holds office in the capacity in which he was initially appointed or a subsequent period where he holds office in a subsequent capacity.
        3) The terms of the Specific Bond may provide:
        (A) that total claims in respect of the acts of the Insolvency Practitioner under all bonds relating to the Insolvency Practitioner are to be limited to a maximum aggregate sum (which shall not be less than USD25,000,000); and
        (B) for a time limit within which claims must be made.
        Amended (as from 6th June 2017).

      • 2.3.3 Specific Penalty Sum

        1) Subject to (2) and (3) below, the amount of the Specific Penalty Sum in respect of a case in which the insolvency practitioner acts, shall be equal to at least the value of the insolvent's assets as reasonably and properly estimated by the Insolvency Practitioner as at the date of the appointment but ignoring the value of any assets:
        (A) charged to a third party to the extent of any amount which would be payable to that third party; or
        (B) held on trust by the insolvent to the extent that any beneficial interest in those assets does not belong to the insolvent.
        2) Where the value of the insolvent's assets is less than USD5,000, the Specific Penalty Sum shall be USD5,000.
        3) Where the value of the insolvent's assets is more than USD5,000,000 the Specific Penalty Sum shall be USD5,000,000.
        Amended (as from 6th June 2017).

    • 2.4 2.4 Disclosures required of Insolvency Practitioners

      • 2.4.1 Disclosure of contraventions

        1) Subject to Rule 2.4.2, an Insolvency Practitioner appointed in respect of a Company shall disclose to the CRO any matter which reasonably tends to show one of the following:
        (A) a contravention, or likely contravention within the meaning of Article 127 of the Companies Regulations;
        (B) a contravention, or likely contravention within the meaning of Article 55 of the Limited Liability Partnership Regulations;
        (C) a contravention, or likely contravention within the meaning of Article 85 of the Partnership Regulations;
        (D) a contravention, or likely contravention of a Relevant Requirement within the meaning of CER Rule 6.1; or
        (E) that a person has been knowingly concerned in any such contravention or likely contravention.

      • 2.4.2 Communications arising from the provision of professional legal advice

        Rule 2.4.1 shall not apply to the extent that compliance with such a requirement would disclose a communication arising from the provision of professional legal advice.

      • 2.4.3 Forms

        An Insolvency Practitioner making a disclosure to the CRO in accordance with Rule 2.4.1 must:

        (A) complete the Prescribed Form in Appendix 1 and file it with the CRO; and
        (B) provide such additional material as may be required by the CRO.