Financial Reporting Council (FRC)
A public consultation to seek views on proposed changes to the Third Country Auditors (Fees) Instrument 2018 has been launched by the FRC.
The regulatory regime governing Third Country Auditors (TCA) is changing because of the UK leaving the EU. If there is no withdrawal agreement between the UK and the EU providing for an implementation period, the UK will apply the TCA regime to non-UK auditors that audit the accounts of companies from outside the UK that issue certain securities on a UK regulated market.
Section 1251 of the Companies Act 2006 provides the Secretary of State with a power to make regulations that require registered TCAs to pay periodical fees. This power has been delegated to the FRC and was most recently exercised by the Third Country Auditors (Fees) Instrument 2018, which needs to be updated to reflect the legislative changes. The 2019 instrument as currently drafted will:
- reflect changes to legislation that will be made as a result of the UK exiting the EU without a withdrawal agreement or implementation period being in place;
- come into force immediately after the UK’s exit in these circumstances;
- set out the level of fees to be paid by various classes of TCA; and
- revoke the Third Country Auditors (Fees) Instrument 2018.
It has been decided not to change fee levels at this time, but the level of costs incurred will be reviewed on a regular basis to ensure they remain appropriate.
Consultation issued on 10 January 2019. Feedback required by 7 February 2019.