The Insolvency and Bankruptcy Board of India (IBBI) on October 23, 2018 notified the Insolvency and Bankruptcy Board of India (Mechanism for Issuing Regulations) Regulations, 2018.
The Insolvency and Bankruptcy Code, 2016 (Code) is a modern economic legislation. The Issuing Regulations are effective from October 22, 2018.
The Section 240 of the Insolvency and Bankruptcy Code, 2016 empowers the Insolvency and Bankruptcy Board to make regulations subject to the conditions that:
(a) Regulations carry out the provisions of the Code
(b) Regulations are consistent with the Code and the rules made there under
(c) Regulations are made by a notification published in the official gazette
(d) Regulations are laid, as soon as possible, before each House of Parliament for 30 days
Mechanisms for issuing regulations
Section 196 (1) (s) of the Code requires the IBBI to specify mechanisms for issuing regulations, including the conduct of public consultation processes, before notification of regulations.
Hence, the IBBI notified the Insolvency and Bankruptcy Board of India (Mechanism for Issuing Regulations) Regulations, 2018 (Issuing Regulations) to govern the process of making regulations.
The Issuing Regulations provide that for the purpose of making or amending any regulations, the IBBI shall upload the following documents on its website for seeking comments from the public-
Procedure to be followed post issuing notification of regulations
• The IBBI will now allow at least 21 days for public to submit their comments.
• It will consider the public comments received and upload the same on its website along with a general statement of its response on the comments, not later than the date of notification of regulations.
• If the Governing Board decides to approve regulations in a form substantially different from the proposed regulations, it will repeat the process under the Issuing Regulations.
• The regulations will be notified promptly after it is approved by the Governing Board and the date of their enforcement shall ordinarily be after thirty days from the date of notification.
• However, where the IBBI is of the opinion that certain regulations are required to be made or existing regulations are required to be amended urgently, it may make regulations or amend the existing regulations with the approval of the Governing Board, without following consultation.
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