New Delhi, March 9, 2018
The Insolvency and Bankruptcy Board of India (IBBI) has proposed to make regulations to govern the very process of making regulations and consulting the public under the insolvency law.
It is an unusual move for any regulator in the country. It has now sought shareholders’ comments by March 31 on the draft ‘Insolvency and Bankruptcy Board of India (Mechanism for Issuing Regulations), Regulations, 2018’. The board has also suggested that it will review each regulation every three years unless such an exercise is warranted earlier, subject to conditions including global best practices and experience of its enforcement. “Given the importance of subordinate legislations for the processes under the code (insolvency and bankruptcy code), it is essential that the IBBI has a structured, robust mechanism, which includes effective engagement with stakeholders, for making regulations.” The draft norms have provisions for seeking public consultations and economic analysis. IBC provides for market-determined and time-bound resolution process, which makes it all the more important for the regulator to constantly review regulations and the process of making them to make the entire insolvency ecosystem robust. This is perhaps the first time that a regulator has come out with draft norms about the regulation-making process.
[The Financial Express]