SUP 3A.3 Appointment of auditors

This section requires a relevant institution to appoint an auditor and supply the FCA with information about its auditor. The FCA requires such information to ensure that the relevant institution has an auditor.

A relevant institution must:

1. (1) appoint an external auditor;

2. (2) notify the FCA, without delay, when it is aware that a vacancy in the office of auditor will arise or has arisen, giving the reason for the vacancy. This notification must be submitted by electronic means made available by the FCA;

3. (3) appoint an auditor to fill any vacancy in the office of auditor which has arisen;

4. (4) ensure that the replacement auditor can take up office at the time the vacancy arises or as soon as reasonably practicable after that; and

5. (5) notify the FCA of the appointment of an auditor, the name and business address of the auditor appointed and the date from which the appointment has effect. This notification must be submitted by electronic means made available by the FCA.

SUP 3A.3.2R applies to every relevant institution. That includes a relevant institution which is under an obligation to appoint an auditor under, for example, the Companies Act 2006. The auditor appointed under SUP 3A.3.2R does not have to be (but may be) the same auditor as is appointed to fulfil such an obligation. SUP 3A.3.2R is made under section 137A of the Act (The FCA’s general rules), as applied by the Payment Services Regulations and the Electronic Money Regulations, in relation to such institutions. It is made under section 340(1) (Appointment), as applied by the Payment Services Regulations and the Electronic Money Regulations, in relation to other institutions.

1. (1) This rule does not apply to a relevant institution that is under an obligation to appoint an auditor imposed by an enactment other than the Act.

2. (2) If a relevant institution fails to appoint an auditor within 28 days of being required to do so, the FCA may appoint an auditor for it on the following terms:

3. (a) the auditor is to be remunerated by the institution on the basis agreed between the auditor and institution or, in the absence of agreement, on a reasonable basis; and

4. (b) the auditor is to hold office until they resign, or the institution appoints another auditor.

SUP 3A.3.4R allows, but does not require, the FCA to appoint an auditor if the relevant institution fails to do so within the 28-day period. When it considers whether to use this power, the FCA will take into account the likely delay until the institution can make an appointment and the urgency of any pending duties of the appointed auditor.

A relevant institution must comply with, and is bound by, the terms on which an auditor is appointed by the FCA under SUP 3A.3.4R.