SCHEDULES

SCHEDULE 10U.K.Recognised supervisory bodies

Part 2U.K.Requirements for recognition of a supervisory body

Monitoring and enforcementU.K.

12[F1(1)The body must—U.K.

(a)have adequate resources for the effective monitoring and enforcement of compliance with its rules, and

(b)ensure that those resources may not be influenced improperly by the persons monitored.

(1A)The body must—

(a)have adequate arrangements for the effective monitoring and enforcement of compliance with its rules, and

(b)ensure that those arrangements operate independently of the persons monitored.]

[F2(2)The arrangements for monitoring must make provision for that function to be performed by the competent authority or any body to whom that authority has delegated tasks in accordance with regulation 3 of the Statutory Auditors and Third Country Auditors Regulations 2016.]

[F3(3)The arrangements for enforcement must—

(a)make provision for that function to be performed by the competent authority or any body to whom that authority has delegated tasks in accordance with regulation 3 of the Statutory Auditors and Third Country Auditors Regulations 2016;

(b)include provision for sanctions which include—

(i)the withdrawal of eligibility for appointment as a statutory auditor;

(ii)a notice requiring the person responsible for any breach to cease the conduct amounting to a breach and to abstain from repeating such conduct;

(iii)a public statement identifying the person responsible for any breach and the nature of the breach (which may take the form of a reprimand or a severe reprimand);

(iv)a temporary prohibition preventing a person responsible for any breach from carrying out statutory audits or signing audit reports;

(v)a temporary prohibition of up to three years preventing a person responsible for any breach from exercising specified functions in a firm that is eligible for appointment as a statutory auditor or in a public interest entity;

(vi)a declaration that the audit report does not satisfy the audit reporting requirements and, where appropriate, a declaration as to the proportion of the audit fee that is not payable as a result;

(vii)an appropriate financial penalty;

(viii)a requirement to take action to mitigate the effect or prevent the recurrence of the contravention;

(ix)exclusion from membership of the body; and

(c)include provision for the body to make available to the public information relating to the steps it has taken to ensure the effective enforcement of its rules.]

[F4(4)The sanctions referred to in sub-paragraph (3)(b)(v) must apply to persons who are no longer members of the body as they apply to members.

(5)The information to be made available to the public under sub-paragraph (3)(c) must include the following information (which the body must continue to make available in accordance with sub-paragraph (7)) in relation to sanctions the body imposes—

(a)information concerning the type of contravention and its nature;

(b)the identity of the person sanctioned, unless any of the circumstances mentioned in sub-paragraph (6) applies; and

(c)where a sanction is subject to appeal, information concerning the status and outcome of any appeal.

(6)The circumstances in which the identity of the person sanctioned must not be made available to the public are—

(a)where that person is an individual and the body considers the publication of personal data would be disproportionate;

(b)where publication would jeopardise the stability of financial markets;

(c)where publication would jeopardise an ongoing criminal investigation; and

(d)where publication would cause disproportionate damage to any institution or individual involved.

(7)Information in relation to sanctions mentioned in sub-paragraph (3) must continue to be made available for a proportionate period and must be published on the body’s website for at least five years after the relevant date.

(8)In sub-paragraph (7), “the relevant date” means—

(a)where the body imposes a sanction and that decision is appealed, the date on which the appeal is determined;

(b)where the body imposes a sanction and that decision is not appealed, the date by which any appeal was required to be lodged.]