The Office of the Superintendent of Bankruptcy (OSB) invites comments from the public and stakeholders on specific issues by launching a consultation process.
There are no open consultations at this time. To obtain any information on a closed consultation, please contact the OSB Communications team.
Proposed New Directive on Trustee Designation and Advertising:
Directive No. 29R3
Ottawa, —The OSB solicited comments from the public and stakeholders on proposed requirements for trustee advertising and use of a professional designation in relation to terms used by licensed trustees to identify themselves when conducting their duties and when advertising their services. These requirements aim to provide greater clarity for Canadians regarding who is licensed by the OSB to provide services under the Bankruptcy and Insolvency Act (BIA) and to help individuals to make informed choices about formal mechanisms to address debt problems.
Directive No. 29R3
This information is intended solely for the purpose of seeking public comment (June 1- June 30, 2015). Directive No. 29R2, Advertising by Trustees, remains in effect.
The Superintendent of Bankruptcy issues licences to trustees following a rigorous qualification and assessment process. Licensed trustees have the authority to administer bankruptcies and proposals under the BIA and offer services to the public. Trustees are the only professionals granted a licence under the BIA. Under the licence, they are responsible for administering all insolvency estates in Canada. The OSB supervises trustees and oversees administration of estates in bankruptcy, commercial reorganizations, proposals and receiverships under the BIA. The OSB also receives and investigates complaints related to trustees and others involved in the insolvency process. The Superintendent of Bankruptcy also has the power to conduct an investigation into the professional conduct of a trustee and issue a decision affecting a trustee's licence to ensure compliance with professional standards that apply to the trustee profession.
The Superintendent has the legislative authority to issue directives that set out requirements relating to the powers, duties and functions of trustees when administering estates filed under the BIA. A Directive on advertising by trustees has existed since 1991 to provide guiding principles and requirements for trustees when advertising their services. Following a review of existing requirements in light of an evolving marketplace and changing needs of debtors, the OSB is proposing a new Directive on Trustee Designation and Advertising.
a) Licensed Trustee in Insolvency and Restructuring (LTIR)
It is proposed that the professional designation Licensed Trustee in Insolvency and Restructuring (LTIR) would be required to be used by individuals holding a valid licence issued by the Superintendent of Bankruptcy as defined in the directive.
- The term "Licensed" is intended to facilitate public identification of professionals who are legally authorized to provide services under the BIA.
- The term "Trustee" is the term used in the BIA.
- The term "Insolvency and Restructuring" is intended to accurately reflect the range of services available under insolvency legislation, including bankruptcies as well as proposals, in addition to other services that a trustee can perform.
- The existing term "Trustee in Bankruptcy" would be discontinued to provide clarity for the public.
- The Canadian Association of Insolvency and Restructuring Professionals (CAIRP) has indicated support for the proposed designation.
b) Requirement to use professional designation
To ensure Canadians are aware of the qualifications and role of their service provider, use of the professional designation would be required in all communications or representations under the legislation to enhance transparency for clients receiving services.
The proposal would make it obligatory for the professional designation to be included in all advertisements soliciting consumer clients to assist debtors in determining which professionals are licensed by the Superintendent.
Inclusion of the professional designation in advertisements soliciting corporate insolvency clients, or pertaining to services unrelated to insolvency clients, would no longer be obligatory.
Individuals using the professional designation who are not licensed trustees could be found guilty of an offence under the BIA. This provision is intended to discourage misrepresentation in the marketplace.
c) Prescribe professional standards for advertising
For the most part, the proposed provisions would retain the existing requirements in Directive 29R2, as well as sections 50 and 51 of the Bankruptcy and Insolvency General Rules. Consistent with requirements in other regulated professions, the obligation to adhere to professional standards in all advertising is intended to protect the integrity of the insolvency profession and guard against undesirable practices in the marketplace.
Where to send comments
Comments on this proposal were invited on or before .
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