Position Paper on the Adverse Effects of the Debt Advisory Marketplace on the Insolvency System

The Office of the Superintendent of Bankruptcy (OSB) has published a Position Paper on the Adverse Effects of the Debt Advisory Marketplace on the Insolvency System. The Position Paper clarifies the responsibilities of Licensed Insolvency Trustees (LITs) as they relate to the debt advisory marketplace and provides guidance to LITs who have entered into business relationships with unregulated individuals or businesses, asserting which circumstances conflict with the Bankruptcy and Insolvency Act, Code of Ethics for Trustees or Superintendent’s Directives and negatively impact the integrity of the insolvency system.

The unregulated debt advisory marketplace continues to be a significant area of compliance concern for the OSB and a multi-pronged approach has been taken to address it, with the Position Paper serving as a key step in this approach. In 2024, the OSB will launch a compliance activity specifically targeting issues that may arise from relationships some LITs have with debt advisors. In the meantime, the OSB strongly urges both corporate and individual LITs who maintain relationships with debt advisors to thoroughly review their business models and adjusts their practices, as needed. 

For further details, please read the Position Paper on the Adverse Effects of the Debt Advisory Marketplace on the Insolvency System. If you have any questions or comments, please contact the OSB Policy and Regulatory Affairs team at osbregulatoryaffairs-affairesreglementairesbsf@ised-isde.gc.ca.