OSB News November 2011
A word from the Superintendent
As the incoming Superintendent of Bankruptcy, it is a pleasure to present you with the latest edition of OSB News, a publication designed to keep insolvency professionals informed about initiatives underway at the Office of the Superintendent of Bankruptcy.
In my first days at the OSB, I've had the opportunity to participate in a mid-year review of the organization's progress and priorities. I have come to appreciate the commitment of OSB staff to their mandate as well as the crucial role that insolvency professionals play in the efficient, effective and fair operation of the bankruptcy and insolvency system.
As a newcomer to the field of insolvency, I have much to become familiar with and I look forward to opportunities to meet with members of the insolvency community and to benefit from your insights and knowledge during the months ahead. As OSB's management team begins the business planning process for the year ahead, I welcome your input on priorities and issues of importance in ensuring that we may continue to strengthen the Canadian insolvency system.
Superintendent of Bankruptcy
Improving mandatory counselling
A new initiative has been launched to conduct a review of the mandatory counselling program introduced under the Bankruptcy and Insolvency Act in 1992. Various aspects will be considered through the review, including the information being delivered, its consistency, the various tools used to deliver the information as well as the outcomes from the counselling provided. The review is being conducted jointly by the Office of the Superintendent of Bankruptcy (OSB) and the Canadian Association of Insolvency and Restructuring Professionals (CAIRP).
Bankrupts and consumers filing a proposal are required to undergo mandatory counselling to assist and educate them on good financial management and on developing successful strategies for achieving financial goals and overcoming financial setbacks.
The evaluation will include roundtables, a look at the content of the counsellor training program (which individuals must pass before they can provide counselling), and a review of the literature in Canada and elsewhere.
This review will lead to recommendations on how to improve and modernize the mandatory counselling process while ensuring that consumers receive consistent information.
In addition, Directive No. 1R3, Counselling in Insolvency Matters, which explains the content and goals of mandatory counselling, may be revised and updated to reflect the results of the review process.
Implementation plans for the licensing framework
The OSB is in the process of implementing the results of its review of the regulatory framework for trustee licensing.
The framework, which had not been looked at substantively since 2000, was reviewed to determine what needed to be changed in order to ensure the framework reflects today's environment, to ensure that the licensing process is comprehensive and transparent, and to ensure that it respects public interests.
The process began in 2010, when the OSB held consultations with stakeholders. The results of this consultation process, including the Superintendent's subsequent decisions on what changes to make or consider, were published in July 2011.
The changes will be implemented in two phases.
In Phase 1, which is underway, straightforward or technical amendments will be made to the Directive on Trustee Licensing (Directive No. 13R2) and supporting process or policy documents. Drafts of these documents will be pre-published on the OSB website in the next few months for stakeholder review and comment.
Phase 2 will involve many steps, beginning with the gathering of feedback from major stakeholders on the proposed amendments to ensure that potential risks are identified and addressed before changes are implemented.
Between now and March 2012, the OSB will arrange conference calls or meetings with diverse stakeholder groups to solicit their views and obtain nominations for participation in a multi-stakeholder roundtable to be held in late winter or early spring.
The OSB would like to remind stakeholders that none of the changes considered in the decision document have been implemented at this time and that the existing directives and policies remain in force.
Any questions about the implementation process can be emailed to the OSB at email@example.com.
More debtor misconduct identified thanks to trustees
As of October 31, trustees had referred 114 potential cases of debtor misconduct to the OSB since it launched the Debtor Compliance Referral Program last June. Most of these referrals have resulted in the conduct of examinations by the OSB.
Trustees can refer files to the OSB through the E-Filing system by uploading the electronic copy of the Debtor Compliance Referral Form and choosing "Debtor Compliance Referral" from the drop-down list.
There are four main criteria a trustee may use in determining if a file should be referred to the OSB: inappropriate disposition of assets, inappropriate delivery and disclosure, lack of cooperation on the part of the debtor, or inappropriate behaviour by the debtor.
The OSB may contact trustees to discuss the program, to get their feedback on it, and to answer any questions that they have.
The OSB is encouraged by the progress made, with the support of its stakeholders, to address debtor misconduct.
New forms, new pilot test for Remittance Advice submissions
This past September, two new Remittance Advice forms were included in the updates of the two most commonly used insolvency practice management software programs: Ascend and UBERbase.
All trustees must switch to the new forms by . After that date, the OSB will not accept submissions using the old Remittance Advice form.
Pilot testing of electronic remittance underway
The OSB is pilot testing the sending of Remittance Advice forms electronically through the E-Filing system. (Trustees will still need to continue mailing the payment cheques to the OSB.) The move is part of an effort to improve the accuracy and timeliness of information flowing between the OSB and trustees. Once the testing is completed, trustees will be invited to start transmitting the remittance forms electronically. In the meantime, only the paper format is available.
New levy deadline reminder
Trustees are reminded that there is now a deadline for the final levy payment. The deadline came into effect with the creation of the new online Trustee Statement of Outstanding Balances.
Of course, trustees must pay the levy at the same time as they issue dividends to creditors. Furthermore, trustees must now pay the final levy no later than 45 calendar days (including the objection period) after they file form 11, 15 or 58 with the OSB.
The new deadline does not affect the due date for the payment of registration fees. Note that the OSB allows until the 15th of the month following the filing of an estate for the payment of the registration fees to be received. Trustees should mail payments far enough in advance of the 15th to allow them to arrive by the deadline.
Positive feedback for online trustee statement
So far, reviews received from trustees of the new online-only Trustee Statement have been very positive. Launched in June and available through E-Filing, the new statement provides up-to-date estate-level information on amounts owed to the OSB in fees and levy payments.
Changes to administration of trustee training
The Canadian Association of Insolvency and Restructuring Professionals (CAIRP) has taken over sole responsibility for the training of those who want to become a licensed trustee in bankruptcy.
The Chartered Insolvency and Restructuring Professional Qualification Program (CIRP Qualification Program) (CQP) is the official qualification process for an individual seeking to become a chartered insolvency and restructuring professional (CIRP). It is replacing the National Insolvency Qualification Program, which was administered jointly by the CAIRP and the OSB.
The CIRP Qualification Program was developed and is managed by a committee that includes representatives from the CAIRP, as well as an ex officio member from the OSB who is assigned by the Superintendent.
For more information on the CQP, visit the CAIRP website.
- Insolvency research – At What Cost? Access to Consumer Credit in a Post-Financial Crisis Canada
- Professional conduct decision – Frank Sheldon Kisluk and Frank S. Kisluk Limited
- Conservatory measures – Jean Maurice Joseph Lazard, Lazard & Associates
- Publications – Management Advisory Board – Chairman's Report
- Statistics — July 2011
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