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Company Law Reform Bill [HL]


Company Law Reform Bill [HL]
Schedule 12 — Arrangements in which registered third country auditors are required to participate

532

 

Supplementary provision with respect to a sufficient period of professional experience

10    (1)  

Periods of theoretical instruction in the fields of finance, law and

accountancy may be deducted from the required period of professional

experience, provided the instruction—

(a)   

lasted at least one year, and

5

(b)   

is attested by an examination recognised by the Secretary of State for

the purposes of this paragraph;

           

but the period of professional experience may not be so reduced by more

than four years.

      (2)  

The period of professional experience together with the practical training

10

required in the case of persons satisfying the requirement in paragraph 7 by

virtue of having a sufficient period of professional experience must not be

shorter than the course of theoretical instruction referred to in that

paragraph and the practical training required in the case of persons

satisfying the requirement of that paragraph by virtue of having completed

15

such a course.

The body offering the qualification

11    (1)  

The body offering the qualification must have—

(a)   

rules and arrangements adequate to ensure compliance with the

requirements of paragraphs 6 to 10, and

20

(b)   

adequate arrangements for the effective monitoring of its continued

compliance with those requirements.

      (2)  

The arrangements must include arrangements for monitoring—

(a)   

the standard of the body’s examinations, and

(b)   

the adequacy of the practical training given by the persons approved

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by it for that purpose.

Schedule 12

Section 871

 

Arrangements in which registered third country auditors are required to

participate

Arrangements for independent monitoring of audits of traded non-Community companies

30

1     (1)  

The arrangements referred to in section 871(1)(a) are appropriate

arrangements—

(a)   

for enabling the performance by the registered third country auditor

of third country audit functions to be monitored by means of

inspections carried out under the arrangements, and

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(b)   

for ensuring that the carrying out of such monitoring and inspections

is done independently of the registered third country auditor.

      (2)  

In this paragraph “third country audit function” means any function

performed as a third country auditor.

 

 

Company Law Reform Bill [HL]
Schedule 12 — Arrangements in which registered third country auditors are required to participate

533

 

Arrangements for independent investigations for disciplinary purposes

2     (1)  

The arrangements referred to in section 871(1)(b) are appropriate

arrangements—

(a)   

for the carrying out of investigations into matters arising in

connection with the performance of third country audit functions by

5

the registered third country auditor,

(b)   

for the holding of disciplinary hearings relating to the registered

third country auditor which appear to be desirable following the

conclusion of such investigations,

(c)   

for requiring such hearings to be held in public except where the

10

interests of justice otherwise require,

(d)   

for the persons before whom such hearings have taken place to

decide whether (and, if so, what) disciplinary action should be taken

against the registered third country auditor, and

(e)   

for ensuring that the carrying out of those investigations, the holding

15

of those hearings and the taking of those decisions are done

independently of the registered third country auditor.

      (2)  

In this paragraph—

“disciplinary action” includes the imposition of a fine; and

“third country audit function” means any function performed as a third

20

country auditor.

Supplementary: arrangements to operate independently of third country auditor

3     (1)  

This paragraph applies for the purposes of—

(a)   

paragraph 1(1)(b), or

(b)   

paragraph 2(1)(e).

25

      (2)  

Arrangements are not to be regarded as appropriate for the purpose of

ensuring that a thing is done independently of the registered third country

auditor unless they are designed to ensure that the registered third country

auditor—

(a)   

will have no involvement in the appointment or selection of any of

30

the persons who are to be responsible for doing that thing, and

(b)   

will not otherwise be involved in the doing of that thing.

      (3)  

Sub-paragraph (2) imposes a minimum requirement and does not preclude

the possibility that additional criteria may need to be satisfied in order for

the arrangements to be regarded as appropriate for the purpose in question.

35

Supplementary: funding of arrangements

4     (1)  

The registered third country auditor must pay any of the costs of

maintaining any relevant arrangements which the arrangements provide

are to be paid by it.

      (2)  

For this purpose “relevant arrangements” are arrangements within

40

paragraph 1 or 2 in which the registered third country auditor is obliged to

participate.

 

 

Company Law Reform Bill [HL]
Schedule 13 — Supplementary provisions with respect to delegation order

534

 

Supplementary: scope of arrangements

5          

Arrangements may qualify as arrangements within either of paragraphs 1

and 2 even though the matters for which they provide are more extensive in

any respect than those mentioned in the applicable paragraph.

Specification of particular arrangements by the Secretary of State

5

6     (1)  

If there exist two or more sets of arrangements within paragraph 1 or within

paragraph 2, the obligation of a registered third country auditor under

section 871(1)(a) or (b), as the case may be, is to participate in such set of

arrangements as the Secretary of State may by order specify.

      (2)  

An order under sub-paragraph (1) is subject to negative resolution

10

procedure.

Schedule 13

Section 881

 

Supplementary provisions with respect to delegation order

Operation of this Schedule

1     (1)  

This Schedule has effect in relation to a body designated by a delegation

15

order under section 881 as follows—

(a)   

paragraphs 2 to 12 have effect in relation to the body where it is

established by the order;

(b)   

paragraphs 2 and 6 to 11 have effect in relation to the body where it

is an existing body;

20

(c)   

paragraph 13 has effect in relation to the body where it is an existing

body that is an unincorporated association.

      (2)  

In their operation in accordance with sub-paragraph (1)(b), paragraphs 2

and 6 apply only in relation to—

(a)   

things done by or in relation to the body in or in connection with the

25

exercise of functions transferred to it by the delegation order, and

(b)   

functions of the body which are functions so transferred.

      (3)  

Any power conferred by this Schedule to make provision by order is a

power to make provision by an order under section 881.

Status

30

2          

The body is not to be regarded as acting on behalf of the Crown and its

members, officers and employees are not to be regarded as Crown servants.

Name, members and chairman

3     (1)  

The body is to be known by such name as may be specified in the delegation

order.

35

      (2)  

The body is to consist of such persons (not being less than eight) as the

Secretary of State may appoint after such consultation as he thinks

appropriate.

 

 

Company Law Reform Bill [HL]
Schedule 13 — Supplementary provisions with respect to delegation order

535

 

      (3)  

The chairman of the body is to be such person as the Secretary of State may

appoint from among its members.

      (4)  

The Secretary of State may make provision by order as to—

(a)   

the terms on which the members of the body are to hold and vacate

office;

5

(b)   

the terms on which a person appointed as chairman is to hold and

vacate the office of chairman.

Financial provisions

4     (1)  

The body must pay to its chairman and members such remuneration, and

such allowances in respect of expenses properly incurred by them in the

10

performance of their duties, as the Secretary of State may determine.

      (2)  

As regards any chairman or member in whose case the Secretary of State so

determines, the body must pay or make provision for the payment of—

(a)   

such pension, allowance or gratuity to or in respect of that person on

his retirement or death, or

15

(b)   

such contributions or other payment towards the provision of such a

pension, allowance or gratuity,

           

as the Secretary of State may determine.

      (3)  

Where—

(a)   

a person ceases to be a member of the body otherwise than on the

20

expiry of his term of office, and

(b)   

it appears to the Secretary of State that there are special

circumstances which make it right for that person to receive

compensation,

           

the body must make a payment to him by way of compensation of such

25

amount as the Secretary of State may determine.

Proceedings

5     (1)  

The delegation order may contain such provision as the Secretary of State

considers appropriate with respect to the proceedings of the body.

      (2)  

The delegation order may, in particular—

30

(a)   

authorise the body to discharge any functions by means of

committees consisting wholly or partly of members of the body;

(b)   

provide that the validity of proceedings of the body, or of any such

committee, is not affected by any vacancy among the members or

any defect in the appointment of any member.

35

Fees

6     (1)  

The body may retain fees payable to it.

      (2)  

The fees must be applied for—

(a)   

meeting the expenses of the body in discharging its functions, and

(b)   

any purposes incidental to those functions.

40

      (3)  

Those expenses include any expenses incurred by the body on such staff,

accommodation, services and other facilities as appear to it to be necessary

or expedient for the proper performance of its functions.

 

 

Company Law Reform Bill [HL]
Schedule 13 — Supplementary provisions with respect to delegation order

536

 

      (4)  

In prescribing the amount of fees in the exercise of the functions transferred

to it the body must prescribe such fees as appear to it sufficient to defray

those expenses, taking one year with another.

      (5)  

Any exercise by the body of the power to prescribe fees requires the

approval of the Secretary of State.

5

      (6)  

The Secretary of State may, after consultation with the body, by order vary

or revoke any regulations prescribing fees made by the body.

Legislative functions

7     (1)  

Regulations or an order made by the body in the exercise of the functions

transferred to it must be made by instrument in writing, but not by statutory

10

instrument.

      (2)  

The instrument must specify the provision of this Part of this Act under

which it is made.

      (3)  

The Secretary of State may by order impose such requirements as he thinks

necessary or expedient as to the circumstances and manner in which the

15

body must consult on any regulations or order it proposes to make.

      (4)  

Nothing in this Part applies to make regulations or an order made by the

body subject to negative resolution procedure or affirmative resolution

procedure.

8     (1)  

Immediately after an instrument is made it must be printed and made

20

available to the public with or without payment.

      (2)  

A person is not to be taken to have contravened any regulation or order if he

shows that at the time of the alleged contravention the instrument

containing the regulation or order had not been made available as required

by this paragraph.

25

9     (1)  

The production of a printed copy of an instrument purporting to be made by

the body on which is endorsed a certificate signed by an officer of the body

authorised by it for the purpose and stating—

(a)   

that the instrument was made by the body,

(b)   

that the copy is a true copy of the instrument, and

30

(c)   

that on a specified date the instrument was made available to the

public as required by paragraph 8,

           

is evidence (or, in Scotland, sufficient evidence) of the facts stated in the

certificate.

      (2)  

A certificate purporting to be signed as mentioned in sub-paragraph (1) is to

35

be deemed to have been duly signed unless the contrary is shown.

      (3)  

Any person wishing in any legal proceedings to cite an instrument made by

the body may require the body to cause a copy of it to be endorsed with such

a certificate as is mentioned in this paragraph.

Report and accounts

40

10    (1)  

The body must, at least once in each calendar year for which the delegation

order is in force, make a report to the Secretary of State on—

(a)   

the discharge of the functions transferred to it, and

 

 

Company Law Reform Bill [HL]
Schedule 13 — Supplementary provisions with respect to delegation order

537

 

(b)   

such other matters as the Secretary of State may by order require.

      (2)  

The delegation order may modify subsection (1) as it has effect in relation to

the calendar year in which the order comes into force or is revoked.

      (3)  

The Secretary of State must lay before Parliament copies of each report

received by him under this paragraph.

5

      (4)  

The following provisions of this paragraph apply as follows—

(a)   

sub-paragraphs (5) and (6) apply only where the body is established

by the order, and

(b)   

sub-paragraphs (7) and (8) apply only where the body is an existing

body.

10

      (5)  

The Secretary of State may, with the consent of the Treasury, give directions

to the body with respect to its accounts and the audit of its accounts.

      (6)  

A person may only be appointed as auditor of the body if he is eligible for

appointment as a statutory auditor.

      (7)  

Unless the body is a company to which section 226 of the Companies Act

15

1985 (c. 6) (duty to prepare individual company accounts) applies, the

Secretary of State may, with the consent of the Treasury, give directions to

the body with respect to its accounts and the audit of its accounts.

      (8)  

Whether or not the body is a company to which section 226 of the

Companies Act 1985 applies, the Secretary of State may direct that any

20

provisions of that Act specified in the directions are to apply to the body,

with or without any modifications so specified.

Other supplementary provisions

11    (1)  

The transfer of a function to a body designated by a delegation order does

not affect anything previously done in the exercise of the function

25

transferred; and the resumption of a function so transferred does not affect

anything previously done in exercise of the function resumed.

      (2)  

The Secretary of State may by order make such transitional and other

supplementary provision as he thinks necessary or expedient in relation to

the transfer or resumption of a function.

30

      (3)  

The provision that may be made in connection with the transfer of a function

includes, in particular, provision—

(a)   

for modifying or excluding any provision of this Part of this Act in its

application to the function transferred;

(b)   

for applying to the body designated by the delegation order, in

35

connection with the function transferred, any provision applying to

the Secretary of State which is contained in or made under any other

enactment;

(c)   

for the transfer of any property, rights or liabilities from the Secretary

of State to that body;

40

(d)   

for the carrying on and completion by that body of anything in the

process of being done by the Secretary of State when the order takes

effect;

(e)   

for the substitution of that body for the Secretary of State in any

instrument, contract or legal proceedings.

45

 

 

Company Law Reform Bill [HL]
Schedule 14 — Statutory auditors: consequential amendments

538

 

      (4)  

The provision that may be made in connection with the resumption of a

function includes, in particular, provision—

(a)   

for the transfer of any property, rights or liabilities from that body to

the Secretary of State;

(b)   

for the carrying on and completion by the Secretary of State of

5

anything in the process of being done by that body when the order

takes effect;

(c)   

for the substitution of the Secretary of State for that body in any

instrument, contract or legal proceedings.

12         

Where a delegation order is revoked, the Secretary of State may by order

10

make provision—

(a)   

for the payment of compensation to persons ceasing to be employed

by the body established by the delegation order;

(b)   

as to the winding up and dissolution of the body.

13    (1)  

This paragraph applies where the body is an unincorporated association.

15

      (2)  

Any relevant proceedings may be brought by or against the body in the

name of any body corporate whose constitution provides for the

establishment of the body.

      (3)  

In sub-paragraph (2) “relevant proceedings” means proceedings brought in

or in connection with the exercise of any transferred function.

20

      (4)  

In relation to proceedings brought as mentioned in sub-paragraph (2), any

reference in paragraph 11(3)(e) or (4)(c) to the body replacing or being

replaced by the Secretary of State in any legal proceedings is to be read with

the appropriate modifications.

Schedule 14

25

Section 893

 

Statutory auditors: consequential amendments

Companies (Audit, Investigations and Community Enterprise) Act 2004 (c. 27)

1     (1)  

Section 16 of the Companies (Audit, Investigations and Community

Enterprise) Act 2004 (grants to bodies concerned with accounting standards

etc) is amended as follows.

30

      (2)  

In subsection (2)—

(a)   

in paragraph (f) for “paragraph 17” to the end substitute “paragraph

21, 22, 23(1) or 24(1) of Schedule 10 to the Company Law Reform Act

2006;”,

(b)   

in paragraph (g) for “Part 2 of that Act” substitute “Part 35 of that

35

Act”.

      (3)  

In subsection (5), in the definition of “professional accountancy body”—

(a)   

in paragraph (a) for “Part 2 of the Companies Act 1989 (c. 40)”

substitute “Part 35 of the Company Law Reform Act 2006”, and

(b)   

in paragraph (b) for “section 32” substitute “section 849”.

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