Statements of Insolvency Practice (SIPs) are issued to insolvency practitioners by the recognised professional bodies and the Insolvency Service with a view to maintaining high standards in insolvency work by setting out basic principles and essential procedures with which London insolvency practitioners are required to comply and harmonising their approach to particular aspects of insolvency.
SIPs are not definitive statements of the law or the obligations imposed by insolvency legislation itself. However, they apply in parallel to the prevailing statutory framework to promote consistency and professional standards among insolvency practitioners. Where an insolvency practitioner is in doubt about any obligation imposed upon them by a SIP, they should obtain appropriate guidance.
Departure from the standards established in SIPs is a matter that should be brought to the attention of a practitioner’s authorising body, and may result in disciplinary or other regulatory action.
SIPs should be read in conjunction with the wider fundamental principles embodied in the Insolvency Code of Ethics and should be applied in accordance with the spirit of that code. A literal interpretation of a SIP may not be appropriate where it would be contrary to the fundamental principles of the code.
Insolvency practitioners should evidence their compliance with SIPs and should, therefore, document their strategies and decision making processes appropriately.
SIPs are commissioned by the Joint Insolvency Committee (JIC), which is made up of representatives from each of the bodies responsible for the authorisation and regulation of insolvency practitioners:
- Association of Chartered Certified Accountants
- Insolvency Practitioners Association
- Institute of Chartered Accountants in England and Wales
- Institute of Chartered Accountants in Ireland
- Institute of Chartered Accountants of Scotland
- Law Society
- Law Society of Scotland
- Insolvency Service (on behalf of the Secretary of State)
They are then produced by the Association of Business Recovery Professionals (R3) and subsequently approved by the JIC and adopted by each of the regulatory bodies.
There are SIPs covering many subjects that are of interest to creditors and others as well as to insolvency practitioners, such as remuneration, work on voluntary arrangements and the use of pre-packaged insolvencies.
The following SIPs are the current versions of required practice for Insolvency procedures in England and Wales (there is no SIP 5):
- SIP 1 – An introduction to Statements of Insolvency Practice (effective: October 2015)
- SIP 2 – Investigations by office holders in administrations and insolvent liquidations (effective: April 2016)
- SIP 3.1 – Individual voluntary arrangements (effective: July 2014)
- SIP 3.2 – Company voluntary arrangements (effective: July 2014)
- SIP 3.3 – Trust deeds (Scotland) (effective: July 2014)
- SIP 4 – Disqualification of directors (effective: September 1998)
- SIP 6 – Decision Making in Insolvency Proceedings (effective: 06 April 2017)
- SIP 7 – Presentation of financial information in insolvency proceedings (effective: May 2011)
- SIP 8 – Summoning and holding meetings of creditors convened pursuant to Section 98 of the Insolvency Act 1986 (superseded by SIP 6 from 6 April 2017)
- SIP 9 – Payments to Insolvency Office Holders and their Associates (effective: December 2015)
- SIP 10 – Proxy Forms (superseded by SIP 6 from 6 April 2017)
- SIP 11 – The Handling of Funds in Formal Insolvency Appointments (effective: June 2007)
- SIP 12 – Records of Meetings in Formal Insolvency Proceedings (superseded by SIP 6 from 6 April 2017)
- SIP 13 – Disposal of Assets to Connected Parties in an Insolvency Process (effective: December 2016)
- SIP 14 – A Receiver’s Responsibility to Preferential Creditors (effective: June 1999)
- SIP 15 – Reporting and Providing Information on their Committees and Commissioners (effective: March 2017)
- SIP 16 – Pre-packaged Sales in Administrations (effective: November 2015)
- SIP 17 – An Administrative Receiver’s Responsibility for the Company’s Records (effective: May 2011)