The existing insolvency practitioners are currently registered with ADGM Registration Authority as the individual Insolvency Practitioner pursuant to section 289 of ADGM Insolvency Regulations 2022 (the ‘Regulations’).
A new legislation was enacted in ADGM which relates to the registration of the individual insolvency practitioners. This legislation is ADGM Insolvency Regulations (Insolvency Practitioner) Rules 2022 (the ‘Rules’). This new legislation affects currently registered insolvency practitioners as set out below.
Pursuant to section 4 (‘Transition Period’) of the ‘Rules’ an insolvency practitioner registered with the Registrar prior to the enactment of the Rules date (a ‘Transitional Insolvency Practitioner’) must apply for registration under the Rules within 6 months from the enactment date (the ‘Transition Period’).
The date of enactment of the Rules is 1-Sept-2022. The Transition Period ends on 1-Mar-2023.
The existing registered insolvency practitioners have two options available to chose from, i.e. (1) remain registered with ADGM Registration Authority under the new Rules and lodge application for registration prior to expiry of the Transition Period; or (2) cancel registration with ADGM Registration Authority by lodging the notification to cancel your registration.
During the Transition Period, a Transitional Insolvency Practitioner shall be eligible to be appointed, and may continue any existing appointments, as a receiver, administrative receiver, administrator, liquidator or provisional liquidator or an administrator of a Deed of Company Arrangement under the Insolvency Regulations.
A Transitional Insolvency Practitioner that fails to register under the Rules prior to the expiry of the Transition Period shall:
- (a) be removed from the Register;
- (b) make appropriate arrangements with respect to the termination of any existing appointment under which the Transitional Insolvency Practitioner is providing Insolvency Practitioner Services and discontinue its performance thereof;
- (c) promptly notify the Registrar or the ADGM Courts (as applicable) of the arrangements that it has made in accordance with the section 4(3)(b) of the Rule; and
- (d) not be eligible for appointment as a receiver, administrative receiver, administrator, liquidator or provisional liquidator or an administrator of a Deed of Company Arrangement under the Insolvency Regulations.
A Transitional Insolvency Practitioner who fails to comply with the requirements in section 4(3)(b) or (3)(c) of the Rules will be in contravention of the Rules and is liable to a fine not exceeding Level 3 on the Abu Dhabi Global Market’s standard fines scale.
The documents required for registration are as follows:
Should you intend to cancel your registration as the Insolvency Practitioner instead of registering under the new Rules, please complete the required cancellation of registration form.
This form sets out the intention to cancel the registration and sets out in writing steps the practitioner intends to take to terminate and discontinue the performance of any Insolvency Practitioner Services, including the proposed timing to complete such steps.
An Insolvency Practitioner who fails to successfully conclude the steps necessary to terminate and discontinue the performance of any Insolvency Practitioner Services within the time required under section 5(3) of the Rule (or such other time period as the Registrar or the ADGM Courts may determine), is in contravention of the Rules and is liable to a fine not exceeding Level 3 on the Abu Dhabi Global Market’s standard fines scale.