Credit Today reports "OFT weighs up insolvency regulation" on the Office of Fair Trading study of the corporate insolvency market.
The OFT is considering whether to recommend that the number of Recognised Professional Bodies (regulators) be reduced to 2 or 3 - or even one. A key issue appears to be the encouragement of trust in the profession and transparency.
There is a lack of understanding about insolvency amongst creditors, according to the OFT. I think that is hardly surprising. The profession and the regulators have a lot to do to educate ordinary businesses and consumers. Insolvency is a complex technical and legal subject and not all practitioners are as user-friendly as they might be!
A tentative thought from the OFT is, interestingly, that secured creditor involvement appears to "regulate" IPs outside the formal system. If so, shouldn't banks' panels be expanded to encompass more IPs?
Insolvency practitioners are highly qualified professionals, and they are highly regulated. That they are trustworthy and properly represent creditors' interests should be made self-evident through effective regulation.
Date: 16th April, 2010
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