<\/p>\n
News:\u00a0Parliamentary Standing Committee<\/span><\/b>\u00a0of Finance in its\u00a0report had argued for the need to have a professional code of conduct for the committee of creditors.\u00a0<\/span>\u00a0<\/span><\/p>\n After this\u00a0<\/span>Insolvency and Bankruptcy Board of India (IBBI)<\/span><\/b>\u00a0had issued a discussion paper proposing a code of conduct (code) for the\u00a0Committee of\u00a0Creditors (CoC) to ensure transparency in its functioning.<\/span>\u00a0<\/span><\/p>\n Since CoCs are not regulated, there exists a\u00a0<\/span>regulatory gap<\/span><\/b>. Several proceedings have also witnessed a\u00a0<\/span>variety of contraventions of provisions<\/span><\/b>\u00a0of the insolvency law by market players<\/span>.<\/span>\u00a0<\/span><\/p>\n IBBI has in the past tried options like directions to insolvency professionals to secure good conduct from players, filing of complaints in special court against the erring players, and filing of appeals.\u00a0But these also had\u00a0a\u00a0<\/span>limited impact.<\/span><\/b>\u00a0<\/span>\u00a0<\/span><\/p>\n Since banks are regulated by the Reserve Bank of India (RBI).<\/span>\u00a0<\/span><\/p>\n Some argue that if the code is prescribed by the IBBI, this will subject banks to regulations of both the\u00a0IBBI and RBI, creating regulatory overlap.<\/span>\u00a0<\/span><\/p>\n However, this is not true as any entity being governed by several regulators for its different activities per se is not regulatory overlap.<\/span>\u00a0<\/span>\u00a0<\/span><\/p>\n For example- An initial public offering (IPO) by a firm, whether in the business of insurance, banking, or telecom, is regulated by SEBI; not by the regulator of the business concerned<\/span>.<\/span>\u00a0<\/span><\/p>\n Successful implementation of the insolvency law\u00a0<\/span>requires all stakeholders<\/span><\/b>\u00a0follow the rules and are subject to regulatory discipline.<\/span>\u00a0<\/span><\/p>\n Any contraventions<\/span><\/b>\u00a0should have\u00a0<\/span>quick consequences.<\/span><\/b>\u00a0<\/span>\u00a0<\/span><\/p>\n Regulatory jurisdiction must rest with one regulator<\/span><\/b>, be it the IBBI, RBI or SEBI. Only one of them should specify a code of conduct, monitor compliance and adjudicate contraventions against all market players.<\/span>\u00a0<\/span><\/p>\n Also,\u00a0it should be ensured that there is a\u00a0<\/span>uniform application of regulatory norms across the market and no sectoral differences<\/span><\/b>\u00a0exist.<\/span>\u00a0<\/span><\/p>\n Source<\/span><\/b>– This post is based on the article \u201c<\/span>A code for the committee of creditors<\/span><\/b>\u201d\u00a0published in\u00a0<\/span>Business Standard<\/span><\/b>\u00a0on\u00a013th\u00a0Jan 2022.<\/span>\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":" News:\u00a0Parliamentary Standing Committee\u00a0of Finance in its\u00a0report had argued for the need to have a professional code of conduct for the committee of creditors.\u00a0\u00a0 After this\u00a0Insolvency and Bankruptcy Board of India (IBBI)\u00a0had issued a discussion paper proposing a code of conduct (code) for the\u00a0Committee of\u00a0Creditors (CoC) to ensure transparency in its functioning.\u00a0 Why there is need… Continue reading A code for the committee of creditors<\/span><\/a><\/p>\n","protected":false},"author":10323,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1566,9],"tags":[10503,216],"class_list":["post-161893","post","type-post","status-publish","format-standard","hentry","category-daily-factly-articles","category-public","tag-business-standard","tag-gs-paper-3","entry"],"jetpack_featured_media_url":"","views":{"total":2,"cached_at":"","cached_date":1702591477},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/161893","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10323"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=161893"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/161893\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=161893"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=161893"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=161893"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Why there is need for a code of conduct for the CoC?<\/span><\/b>\u00a0<\/span><\/h5>\n
Who should bring this code?\u00a0IBBI or RBI<\/span><\/b>\u00a0<\/span><\/h5>\n
What is the way forward?<\/span><\/b>\u00a0<\/span><\/h5>\n