The Small Business, Enterprise and Employment Act 2015 (Consequential Amendments) (Reports on Conduct of Directors) (Northern Ireland) Regulations 2016

Made: 11th March 2016

Laid before Parliament: 15th March 2016

Coming into force: 6th April 2016

The Secretary of State, in exercise of the powers conferred by section 159(1) and (2) of the Small Business, Enterprise and Employment Act 2015[^f00001], makes the following Regulations.

Citation and commencement

1

• (1) These Regulations may be cited as the Small Business, Enterprise and Employment Act 2015 (Consequential Amendments) (Reports on Conduct of Directors) (Northern Ireland) Regulations 2016 and come into force on 6th April 2016.

• (2) In these Regulations “the 2003 Rules” means the Insolvent Companies (Reports on Conduct of Directors) Rules (Northern Ireland) 2003[^f00002].

Amendments to the 2003 Rules

2

• (1) The 2003 Rules are amended as follows.

• (2) For Rule 4 substitute—

(4) An office-holder[^f00004] must prepare a conduct report required under Article 10A(1) of the Order in the Form DCR set out in the Schedule.

• (3) For Rule 5 substitute—

(5) (1) An office-holder who without reasonable excuse fails to comply with any of the obligations imposed by Articles 10A(4) or 10A(5) of the Order is guilty of an offence and— (a) on summary conviction of the offence, is liable to a fine not exceeding level 3 on the standard scale, and (b) for continued contravention is liable to a daily default fine: that is to say, he is liable on a second or subsequent summary conviction of the offence to a fine of one-tenth of level 3 on the standard scale for each day on which the contravention is continued (instead of the penalty specified in sub-paragraph (a)). (2) Article 374 of the Insolvency (Northern Ireland) Order 1989 (summary proceedings) has effect in relation to an offence under this rule as to offences under Parts II to VII of that Order.

• (4) Rule 6 is omitted.

• (5) For the forms set out in the Schedule there shall be substituted the form designated DCR as set out in the Schedule to these Regulations.

Review

3

After Rule 8 of the 2003 Rules, insert—

(9) (1) A Minister of the Crown must from time to time— (a) carry out a review of these Rules, (b) set out the conclusions of the review in a report, and (c) publish the report. (2) The report must in particular— (a) set out the objectives intended to be achieved by these Rules, (b) assess the extent to which those objectives are achieved, and (c) if those objectives remain appropriate, assess the extent to which they could be achieved in another way which involves less onerous regulatory provision. (3) The first report under this rule must be published before the end of the period of 5 years beginning on 6th April 2016. (4) Subsequent reports under this rule must be published at intervals not exceeding 5 years. (5) In this regulation, “regulatory provision” has the meaning given by section 32(4) of the Small Business, Enterprise and Employment Act 2015.

Transitional and savings provisions

4

• (1) The amendments made by these Regulations do not apply to a person required to deliver a report within a period specified in an order made in accordance with rule 7(2) of the 2003 Rules, if the period specified in the order has not expired on 6th April 2016.

• (2) When, in relation to a company (as defined in article 2(2) of the Company Directors (Northern Ireland) Order 2002[^f00005]) the relevant date in rule 5(4) of the 2003 Rules occurred before 6th April 2016, the 2003 Rules continue to apply without the amendments made by these Regulations.

SCHEDULE

Signed

Anna Soubry — Minister of State for Small Business, Industry and Enterprise — Department for Business, Innovation and Skills — 11th March 2016

Explanatory note

(This note is not part of the Regulations)

EXPLANATORY NOTE

These Regulations amend the Insolvent Companies (Reports on Conduct of Directors) Rules (Northern Ireland) 2003 (“the 2003 Rules”) in consequence of the commencement of paragraph 5 of Schedule 8 to the Small Business, Enterprise and Employment Act 2015.

Regulation 2 substitutes rule 4 and the Schedule to provide that the report which Article 10A(1) of the Company Directors Disqualification (Northern Ireland) Order 2002 (S.I. 2002/3150) (N.I. 4)) (“the Order”) requires the office-holder to prepare on a person’s conduct as director of an insolvent company is to be made using new Form DCR.

Regulation 2 also substitutes rule 5 to provide that an office-holder is guilty of an offence if they fail (without reasonable excuse) to comply with Article 10A(4) or 10A(5) of the Order. On conviction for such an offence, the office-holder would be liable to a fine not exceeding level 3 on the standard scale and for continued contravention would be liable to a daily default fine.

Article 10A (4) of the Order requires the office-holder to send the conduct report to the Department before the end of 3 months beginning with the insolvency date, or such longer period as the Department considers appropriate in the particular circumstances. Article 10(5) requires the office-holder to send any new information which comes to their attention to the Department as soon as reasonably practicable.

Regulation 2 also revokes Rule 6.

Regulation 3 requires a Minister of the Crown to review the operation and effect of the 2003 Rules and publish a report within five years after these Regulations come into force. Following the review it will fall to the Minister to consider whether the 2003 Rules should be revoked or should continue in force with or without further amendment. A further instrument would be needed to revoke the 2003 Rules or amend them.

Regulation 4 provides transitional and savings provisions.

A regulatory impact assessment has not been produced for this instrument as the policy was covered in a regulatory impact assessment produced by the Northern Ireland Insolvency Service with respect to provisions in the Small Business, Enterprise and Employment Act 2015 amending the Company Directors Disqualification (Northern Ireland) Order 2002. Copies of this regulatory impact assessment are available from the Legislation Unit, Insolvency Service, Fermanagh House. 20A Ormeau Avenue, Belfast BT2 8NJ.

Footnotes

[^f00001]: 2015 c.26.

[^f00002]: S.R. (NI) 2003 No 357.

[^f00003]: The Company Directors Disqualification (Northern Ireland) Order 2002 (S.I. 2002/3150 (N.I. 4)); the Order was amended by the Small Business, Enterprise and Employment Act 2015 (c.26), Schedule 8.

[^f00004]: “Office-holder” is defined in Article 10A(9) of the Company Directors Disqualification Order 2002; article 10A was inserted by the Small Business, Enterprise and Employment Act 2015 (c.26), Schedule 8 paragraph 5.

[^f00005]: 2002 No. 3150 (N.I .4).