FirstPreviousNextLast
View all pages

Review of the Trustee Licensing Regulatory Framework
Consultation Paper – Annex A to C

Annex A

Harmonization of the Directive on Trustee Licensing (Directive No. 13R2) with the Memorandum of Understanding between the Superintendent of Bankruptcy and the Canadian Association of Insolvency and Restructuring Professionals (CAIRP)

Background

A. Licensing Program

At one time, there were two ways for candidates to obtain a trustee licence: members of the Canadian Insolvency Practitioners Association (as it was called) had to follow a mandatory training program before taking a comprehensive national examination (National Insolvency Examination (NIE)). Non-members, on the other hand, could access the NIE directly, without following the training program.

On September 11, 1997, the Superintendent of Bankruptcy reached an agreement with CAIRP to the effect that all licensing candidates must follow the same process to obtain a trustee licence. The objective was to promote professionalism, increase the level of expertise and maintain public confidence in the training system. Before taking the oral examination, candidates had to successfully complete the training course, interim exams and the NIE; study under the guidance of a sponsor; and, finally, accumulate a certain number of hours of practical experience.

This first agreement was extended, with amendments, on September 24, 2004. A new agreement was concluded on October 8, 2009. The purpose of the new agreement is to ensure that the training program continues to meet its primary objectives.

B. Preliminary Considerations

Section 5(4)d) of the Bankruptcy and Insolvency Act authorizes the Superintendent to issue directives governing criteria to be applied by the Superintendent in determining whether a trustee licence is to be issued to a person, and governing qualifications and activities of trustees. The Superintendent issued the Directive on Trustee Licensing, which sets out required qualifications and criteria for obtaining and maintaining a trustee licence.

Relevant provisions of the current Directive on Trustee Licensing and the Memorandum of Understanding follow.

Directive on Trustee Licensing

To obtain a trustee licence, the applicant must satisfy the conditions set out in paragraphs 5 to 13 of the Directive on Trustee Licensing and paragraphs 1 to 14 of Appendix A of the Directive. These relevant excerpts are reproduced in Annexes B and C of this document.

  1. Prerequisite qualifications: The applicant must satisfy the prerequisites in paragraph 6 of the Directive:
    1. he or she must not be an insolvent person and not have been in a state of insolvency within five (5) years preceding the date of the application;
    2. he or she must possess a Canadian university degree or its equivalent, or hold a relevant professional designation recognized in Canada or have a minimum of five (5) years relevant work experience;
    3. he or she must:
      1. have successfully completed the National Insolvency Qualification Program (NIQP)Footnote 1; and
      2. have passed the National Insolvency Examination;
    4. he or she must have successfully completed the Insolvency Counsellor's Qualification Course, as established by the Superintendent of Bankruptcy; and
    5. he or she must be in good standing with, and not subject to any current disciplinary action by, any professional organization of which he or she is a member.
  2. Specific qualifications: The applicant must satisfy the specific qualifications set out in paragraphs 8 to 12 of the Directive with regard to reputation and suitability. These specific qualifications are not mentioned in the Memorandum of Understanding between the Superintendent of Bankruptcy and CAIRP, and will not be discussed in this document.
  3. Time limit and number of attempts: The applicant is limited to three (3) appearances before the Board of Examination, over a period of ten (10) years from the date of enrolment in the NIQP.

Memorandum of Understanding

To become a candidate for the NIQP, the applicant must satisfy the conditions set out in sections 36 to 38 and 41 of the Memorandum of Understanding (entrance requirements and membership in CAIRP). There are also examinations that must be passed.

  1. Entrance requirements: The applicant must meet one or more of the following entrance requirements:
    • hold a Canadian university degree or equivalent, or hold a relevant professional designation recognized in Canada, being a CA, CMA, CGA (or as such designation may be known from time to time), or LL.B (or similar law degree);
    • be in the final level of a program leading to such a designation;
    • have a minimum of five (5) years relevant experience and have successfully completed a minimum of one accredited course in each of accounting and business law at a post secondary education level.
  2. Membership in CAIRP: All NIQP candidates (except employees of the Office of the Superintendent of Bankruptcy) must enrol as articling members of CAIRP.
  3. Exemptions: The Memorandum of Understanding includes three types of exemptions:
    • NIQP Committee could exercise discretion in admitting applicants who do not meet the entrance requirements in accordance with pre-established guidelines.
    • An applicant who possesses relevant experience and knowledge may, on recommendation of the NIQP Committee, be exempted from the entire program and be allowed one attempt at the National Insolvency Examination.
    • All individuals wishing to become a CIRP must enrol in and complete the NIQP. The Superintendent will expect applicants for a licence for a trustee in bankruptcy to have successfully completed the NIQP, except in extraordinary circumstances as determined at the sole discretion of the Superintendent.

C. Harmonization Proposal

The Superintendent is contemplating adopting the entrance requirements of the Memorandum of Understanding for use in the Directive on Trustee Licensing. The table below illustrates the prerequisites that the candidate must meet.

This table illustrates the prerequisites that the candidate must meet.
Current Situation Proposed Harmonization
6. An individual who wishes to apply for a licence must meet the following prerequisites:

a. not be an insolvent person and not have been in a state of insolvency within five (5) years preceding the date of the application;

No change.

b. possess a Canadian university degree or its equivalent, or hold a relevant professional designation recognized in Canada or have a minimum of five (5) years relevant work experience;

b. the candidate must meet one or more of the following entrance requirements:

  1. hold a Canadian university degree or equivalent, or hold a relevant professional designation recognized in Canada, being a CA, CMA, CGA (or as such designation may be known from time to time), or LL.B (or similar law degree);
  2. be in the final level of a program leading to such a designation;
  3. have a minimum of five (5) years relevant experience and have successfully completed a minimum of one accredited course in each of accounting and business law at a post-secondary education level;

c. have successfully completed:

  1. the National Insolvency Qualification Program; and
  2. the National Insolvency Examination,

as described in the licensing process set out in Appendix A [of the Directive];
  1. no change except for the name of the program (Professional Qualification Program), subject to a possible exemption as mentioned below;
  2. no change.

d. have successfully completed the Insolvency Counsellor's Qualification Course, as established by the Superintendent of Bankruptcy;

d. he or she must have successfully completed the Insolvency Counsellor's Qualification Course offered or certified by CAIRP;

e. be in good standing with, and not subject to any current disciplinary action by, any professional organization of which the applicant is a member.

No change.

The Superintendent is also contemplating:

  1. revoking the limits on the number of attempts before the Board of Examination and the time allotted to obtain a licence as they currently exist;
  2. including in the Directive the exemptions in the Memorandum of Understandingand adapting them as needed.
top of page

Annex B

Criteria to Obtain a Trustee Licence (Paragraphs 5 to 13 of the Directive on Trustee Licensing)

Trustee Licence – Individual

Application

  1. Application by an individual for a trustee licence shall be made using Form 2, Application for Trustee Licence (Individual).

Prerequisite Qualifications

  1. An individual who wishes to apply for a licence must meet the following prerequisites:
    1. not be an insolvent person and not have been in a state of insolvency within five (5) years preceding the date of the application;
    2. possess a Canadian university degree or its equivalent, or hold a relevant professional designation recognized in Canada or have a minimum of five (5) years relevant work experience;
    3. have successfully completed:
      1. the National Insolvency Qualification Program; and
      2. the National Insolvency Examination,

        as described in the licensing process set out in Appendix A [of the Directive];

    4. have successfully completed the Insolvency Counsellor's Qualification Course, as established by the Superintendent of Bankruptcy; and
    5. be in good standing with, and not subject to any current disciplinary action by, any professional organization of which the applicant is a member.

Specific Qualifications

  1. An applicant who meets the prerequisite qualifications must satisfy the reputation and suitability requirements described below.

(i) Reputation

  1. The applicant shall
    1. be of good character and reputation; and
    2. satisfy the Superintendent that the issuance of a licence will not impair public confidence in the insolvency process.
  2. Without limiting paragraph 8, an applicant who has been convicted of an indictable offence must satisfy the Superintendent that a pardon has been granted and that the conviction was not related to an offence of a commercial or an economic nature.
  3. Without limiting paragraph 8, an applicant who has been found guilty of professional misconduct must satisfy the Superintendent that such misconduct was not of a commercial or an economic nature. Where the misconduct is not of a commercial or an economic nature, the applicant must show that the misconduct is not likely to impair public confidence in the applicant or in the bankruptcy and insolvency system in general.

(ii) Suitability

  1. The suitability of a candidate to become a trustee is evaluated by a Board of Examination that will consider the skills of the applicant.
  2. The applicant shall demonstrate before the Board:
    1. the ability to administer professional engagements;
    2. the ability to apply related legislation and jurisprudence;
    3. appropriate experience and a good understanding of business and consumer matters;
    4. good judgment in the administration of professional engagements; and
    5. a high standard of business ethics and professionalism.

Limit

  1. An applicant is limited to three (3) appearances before the Board of Examination, over a period of ten (10) years from the date of enrolment in the National Insolvency Qualification Program, as described in the licensing process set out in Appendix A.
top of page

Annex C

Process Regarding Issuance of an Individual Trustee Licence (Paragraphs 1 to 14 of Appendix A of the Directive on Trustee Licensing)

  1. In order to obtain an individual trustee licence, a person must meet the prerequisite qualifications set out in paragraph 6 of the Directive.

Professional Designation

  1. Examples of relevant professional designations are those relating to accounting, law, business administration, management and finance.

Insolvency Counsellor's Qualification Course

  1. Successful completion of the Insolvency Counsellor's Qualification Course is required in order for an individual to qualify to conduct counselling under the Bankruptcy and Insolvency Act. It is also a prerequisite qualification that must be met by an individual who wishes to apply for a trustee licence, as set out in paragraph 6(d) of the Directive.
  2. This course provides individuals with the basic skills and knowledge required for delivering counselling to insolvent consumers. The course is intended to ensure that individual debtors will receive professional counselling from qualified people who can assist them in adopting more responsible practices in their financial matters.

National Insolvency Qualification Program

  1. By Memorandum of Understanding (MOU), the Superintendent of Bankruptcy and the Canadian Insolvency Practitioners Association (CIPA) have established the National Insolvency Qualification Program (NIQP) as a common qualification system for providers of insolvency and business-recovery services in Canada.
  2. The NIQP is a three (3) year joint education process that consists of a body of knowledge, a prescribed course of study, a tutorial, written examinations, the National Insolvency Examination (NIE) and an oral examination before a Board of Examination.
  3. Individuals will be allowed ten (10) years from the date of enrolment to complete the NIQP, with no more than three (3) attempts at any examination, including the NIE and the oral board examination.
  4. Subject to the transitional provisions and exemptions set out in the MOU, enrolment in and successful completion of the NIQP is compulsory for any individual wishing to become a trustee.

National Insolvency Examination

  1. The NIE, held jointly by the Office of the Superintendent of Bankruptcy (OSB) and the CIPA, is the written final examination that individuals must pass.
  2. The purpose of the NIE is to assess the technical knowledge of a person wishing to apply for an individual licence.
  3. The NIE is held once per year at locations and times determined by the OSB and the CIPA.
  4. The NIE consists of two (2) parts, each three (3) hours long. The exam contains questions on bankruptcy and proposals, as well as on receiverships.
  5. The examinations are marked by a committee made up of representatives of the OSB and the CIPA.
  6. An individual may appeal the examination result, in writing, within thirty (30) days after the date on which the results are sent.

Footnotes

  1. 1 back to footnote reference 1 In a near future, the program will be renamed Chartered Insolvency and Restructuring Professional Qualification Program or Professional Qualification Program (PQP).
FirstPreviousNextLast
View all pages