Resolution no. 17439

Definition of the terms and conditions for registration of third country auditors and audit entities pursuant to article 43, subsection 9, Italian Legislative Decree no. 39 of 27 January 2010 (text supplemented with amendments made by Resolution no. 18081 of 25 January 2012)

 THE COMMISSIONE NAZIONALE PER LE SOCIETA’ E LA BORSA (CONSOB)

HAVING REGARD TO Italian Law no. 216 of 7 June 1974, as amended;

HAVING REGARD TO Italian Legislative Decree no. 58 of 24 February 1998, as amended, and in particular article 161 containing provisions on the Special Register of audit firms held by Consob;

HAVING REGARD TO Directive 2006/43/EC of 17 May 2006 on statutory audits of annual accounts and consolidated accounts, amending Directives 78/660/EEC and 83/349/EEC and repealing Directive 84/253/EEC;

HAVING SPECIFIC REGARD TO article 45 of said Directive, including provisions on registration third country auditors and audit entities;

HAVING REGARD TO the European Commission Decision of 29 July 2008 permitting auditors and audit entities of certain third countries, as specifically identified and currently indicated in Annex 1 to this resolution, for the transitional period established in the Decision , to continue their audit activities as an exception to article 45 of the Directive, provided that they submit information regarding themselves, and the auditing standards and independence requirements applied in their activities;

HAVING REGARD TO Italian Legislative Decree no. 39 of 27 January 2010, containing provisions on the "Implementation of Directive 2006/43/EC on statutory audits of annual accounts and consolidated accounts, amending Directives 78/660/EEC and 83/349/EEC and repealing Directive 84/253/EEC";

HAVING SPECIFIC REGARD TO article 2, subsection 1, of the aforementioned decree, which establishes the Register held by the Ministry of Economy and Finance in which statutory auditors and audit firms are entered;

HAVING REGARD TO article 34, subsection 1 of the aforementioned Legislative Decree, which envisages registration of third country auditors and audit entities "that provide audit reports on the annual or consolidated accounts of a company incorporated in a third country, whose transferable securities are admitted to trading on an Italian regulated market, except when the company is an issuer exclusively of debt securities admitted to trading on a regulated market the denomination per unit of which is at least fifty thousand euro or, in the case of debt securities denominated in another currency, equivalent, at the date of issue, to at least fifty thousand euro";

HAVING REGARD TO article 43, subsection 1, paragraph i), of the aforementioned decree, based on which article 161, Italian Legislative Decree no. 58 of 24 February 1998 is repealed but continues to apply until entry into force of the implementing provisions of said decree;

ALSO HAVING REGARD TO article 43, subsection 9, of the aforementioned Legislative Decree, based on which, until entry into force of the implementing provisions indicated in subsection 1 of the article in question, "Consob shall register third country auditors and audit entities referred to in article 34, subsection 1, in a specific section of the Special Register of Audit Firms envisaged in article 161, Italian Legislative Decree no. 58 of 24 February 1998, in accordance with the terms and conditions established therein";

Lastly, HAVING REGARD TO article 34, subsection 6, again of the aforementioned decree, based on which "the audit reports on annual or consolidated accounts of the entities referred to in subsection 1, issued by third country auditors and audit entities not entered on the Register of Statutory Auditors shall have no legal effect in Italy";

Given that, until set-up of said Register by the Italian Ministry of Economy and Finance, the aforementioned article 34, subsection 6, is equally applicable to audit reports prepared by third country auditors and audit entities not entered in the specific Section of the Special Register held by Consob;

GIVEN the need and urgency to adopt provisions identifying the terms and conditions allowing third country auditors and audit entities to be entered pursuant to article 34, subsection 1, in a specific Section of the Special Register held by Consob, in compliance with the provisions of article 43, subsection 9, Italian Legislative Decree no. 39 of 27 January 2010;

GIVEN article 23, Italian Law no. 262 of 28 December 2005, which, amongst others, allows Consob to diverge from principles governing the preparation of regulatory documents, where necessary or in urgent cases, and in particular from the consultation of representative bodies of the supervised persons, financial service providers and consumers;

ALSO GIVEN that, though it is not possible to accurately envisage the validity period of provisions adopted under this resolution, it is certain that they will be temporary, since they will be replaced by regulatory provisions as envisaged in article 34, subsection 7, of the decree referred to above, as soon as the Register is set up;

CONSIDERED, therefore, that it is possible to dispense with consultation of the representative bodies of supervised persons, financial service providers and consumers;

Lastly, HAVING REGARD TO Italian Law no. 241 of 7 August 1990, containing "New regulations on administrative proceedings and right of access to administrative documents", later amended, and in particular article 2, subsection 5, which entrusts the supervisory authorities, and hence Consob, with regulation of the terms for conclusion of proceedings under their responsibility;

 HEREBY RESOLVES:

 PART I
GENERAL PROVISIONS

 Article 1
(Regulatory sources)

 1. These provisions are adopted pursuant to article 43, subsection 9, Italian Legislative Decree no. 39 of 27 January 2010.

 Article 2
(Definitions)

1. In this resolution the following definitions shall apply:

a) "Directive": Directive 2006/43/EC of 17 May 2006 on statutory audits of annual accounts and consolidated accounts, amending Directives 78/660/EEC and 83/349/EEC and repealing Directive 84/253/EEC;

b) "Consolidated Law": Italian Legislative Decree no. 58 of 24 February, 1998;

c) "Third country audit entity": an entity, regardless of its legal status, which is appointed to audit the annual or consolidated accounts of a company incorporated in a third country;

d) "Third country": a country that is not a member of the European Union;

e) "Auditor": a natural person responsible for carrying out audit of the annual or consolidated accounts of a company incorporated in a third country on behalf of third country audit entity;

f) "Third country auditor": a natural person appointed to audit the annual or consolidated accounts of a company incorporated in a third country;

g) "Section": the specific Section in the Special Register of Audit Firms pursuant to article 161 of the Consolidated Law, in which Consob registers third country auditors and audit entities in accordance with article 34, subsection 1, Italian Legislative Decree no. 39 of 27 January 2010;

h) "Section A": the specific part of the Section in the Special Register in which third country auditors and audit entities are registered in compliance with article 2 of the European Commission Decision of 19 January 2011[1];

i) "Section B": the specific part of the Section in the Special Register in which third country auditors and audit entities are registered in compliance with article 45, paragraph 1, of Directive 2006/43/EC.

Article 3
(Set-up of the Section for third country auditors and audit entities)

 1. A specific Section in the Special Register of Audit Firms pursuant to article 161 of the Consolidated Law, has been set up for third country auditors and audit entities in accordance with article 34, subsection 1, Italian Legislative Decree no. 39 of 27 January 2010.

2. The Section referred to in subsection 1 above is divided into two parts for the registration of third country auditors and audit entities in compliance with article 2 of the European Commission Decision of 19 January 2011 and with article 45 of the Directive, respectively[2].

3. For each third country auditor or audit entity registered in compliance with article 2 of the European Commission Decision of 19 January 2011, Section A shall include the following information:

a) the name, address and contact details of the third country auditor or the name, legal status and contact details of the third country audit entity;

b) the name of the network of which the applicant is a member, if any;

c) registration details of the applicant as auditor or audit entity in its home country and indication of the Authority responsible for that registration;

d) details of any registration of the applicant as third country auditor or audit entity in another member state of the European Union or the European Economic Area;

e) details of any registration of the applicant in compliance with Chapters II and III of the Directive in another member state of the European Union or the European Economic Area[3].

4. For each third country auditor or audit entity registered in compliance with article 45, paragraph 1, of the Directive, Section B shall include the following information:

a) the name, address and contact details of the third country auditor or the name, legal status and contact details of the third country audit entity;

b) identification and contact details of all offices responsible for audit reports pursuant to article 34, subsection 1, Italian Legislative Decree no. 39 of 27 January 2010;

c) the name of the network of which the applicant is a member, if any;

d) registration details of the applicant as auditor or audit entity in its home country and indication of the Authority responsible for that registration;

e) details of any registration of the applicant as third country auditor or audit entity in another member state of the European Union or the European Economic Area ;

f) details of any registration of the applicant in compliance with Chapters II and III of the Directive in another member state of the European Union or the European Economic Area;

g) the names, professional qualifications and contact details of each member of the administrative or management body of the third country audit entity;

h) the names of auditors responsible for carrying out audits of companies pursuant to article 11, subsection 2, paragraph k), registration details of them as auditors in their home country and an indication as to whether such persons meet requirements equivalent to those established in articles 6, 7, 8, 9 and 10 of the Directive.

5. The information contained in the Section of the Special Register shall be stored in electronic format, with free access via the Consob web site.

6. Registration in this Section shall not qualify as authorisation to carry out statutory audit activities in Italy.

 Article 4
(Section updates)

 1. Third country auditors and audit entities registered in the Section of the Special Register pursuant to article 1 above shall be responsible for the information provided for registration purposes. They shall inform Consob without undue delay of any change in said information, submitting related documentation if appropriate.

2. Consob shall update the Section of the Special Register.

  PART II

 REGISTRATION PROCEDURE FOR THIRD COUNTRY AUDITORS AND AUDIT ENTITIES PURSUANT TO ARTICLE 34, SUBSECTION 1, ITALIAN LEGISLATIVE DECREE NO. 39 OF 27 JANUARY 2010, IN COMPLIANCE WITH ARTICLE 2 OF THE EUROPEAN COMMISSION DECISION OF 19 JANUARY 2011[4]

  Article 5
(Scope)

1. The provisions of this Part shall apply to third country auditors and audit entities of countries indicated in Annexes 1 and 2 to this resolution, that provide audit reports on the annual or consolidated accounts of the companies referred to in article 34, subsection 1, Italian Legislative Decree no. 39 of 27 January 2010[5].

2. Third country auditors and audit entities pursuant to subsection 1 above shall be registered in Section A.

Article 6
(Application for registration)

 1. The application for registration in Section A of the Special Register shall be submitted to Consob using Form A attached herewith, signed by the third country auditor or the duly appointed legal representative of the third country audit entity.

2. The application shall contain:

a) the name, address and contact details of the third country auditor or the name, legal status and contact details of the third country audit entity;

b) the name of the network of which the applicant is a member, if any, and, as an attachment, the description of the network taking into account the definition of a network pursuant to article 2, paragraph 7, of the Directive;

c) registration details of the applicant as auditor or audit entity in its home country and indication of the Authority responsible for that registration;

d) details of any registration of the applicant as third country auditor or audit entity in another member state of the European Union or the European Economic Area;

e) details of any registration of the applicant in compliance with Chapters II and III of the Directive in another member state of the European Union or the European Economic Area;

f) as an attachment, a description of the internal quality control system of the third country audit entity;

g) an indication of whether and when the last external quality assurance review was conducted and identification details of the Authority responsible for the external quality assurance review. If external quality assurance review has been conducted, necessary information about the outcome, the main shortcomings and the main measures the applicant has undertaken to address the shortcomings shall be attached;

h) the list of relevant audit clients according to article 34, subsection 1, Italian Legislative Decree no. 39 of 27 January 2010;

i) the auditing standards and the independence standards and rules the applicant applies in carrying out the audits for clients pursuant to paragraph h);

j) the list of attachments to the application.

3. The application for registration, including related attachments, must be prepared in Italian or in English. Without prejudice to the provisions of Italian Presidential Decree no. 445 of 28 December 2000, attachments submitted in another language as an original version must be accompanied by a translation in Italian.

 Article 7
(Examination of the application)

 1. Consob shall verify that the application is complete and inform the applicant of any missing information.

2. The applicant shall promptly integrate the application with the information requested.

3. From the date of issue of the request for information pursuant to subsection 1 above, and until the date of receipt of such information by Consob, the deadline specified in subsection 4 for completion of the examination shall be suspended.

4. Consob shall make its decision within one hundred and twenty days of submission of the application.

 Article 8
(Cancellation)

 1. Consob shall cancel a third country auditor or audit entity registered in Section A where it is found out that:

a) information requested by Consob for the purpose of its duties related or instrumental to keeping the Section of the Register has not been notified;

b) registration in the home country as auditor or audit entity has been cancelled.

PART III

 REGISTRATION PROCEDURE FOR THIRD COUNTRY AUDITORS AND AUDIT ENTITIES PURSUANT TO ARTICLE 34, SUBSECTION 1, ITALIAN LEGISLATIVE DECREE NO. 39 OF 27 JANUARY 2010, IN COMPLIANCE WITH ARTICLE 45 OF THE DIRECTIVE

 Article 9
(Scope)

 1. The provisions of this Part shall apply to third country auditors and audit entities of countries not indicated in Annexes 1 and 2 to this resolution, that provide audit reports on the annual or consolidated accounts of the companies referred to article 34, subsection 1, Italian Legislative Decree no. 39 of 27 January 2010[6].

2. Third country auditors and audit entities pursuant to subsection 1 above shall be registered in Section B.

Article 10
(Registration conditions)

1. Registration in Section B shall be subject to the following conditions being met:

a) the majority of the members of the administrative or management body of the third country audit entity meets requirements pursuant to articles 6, 7, 8, 9 and 10 of the Directive;

b) auditors responsible for carrying out audits for clients pursuant to article 11, paragraph k), on behalf of the third country audit entity meets requirements equivalent to those specified in articles 6, 7, 8, 9 and 10 of the Directive;

c) audits for clients pursuant to article 11, paragraph k), are carried out in accordance with the auditing standards referred to in article 26 of the Directive and in compliance with the independence requirements of articles 22, 24 and 25 of said Directive, or in compliance with equivalent standards and requirements;

d) the third country auditor or members of the administrative and management body of third country audit entity, and the auditors responsible for carrying out audits for clients pursuant to article 11, paragraph k), meet the integrity requirements as established in article 13;

e) third country auditors or audit entities publish an annual transparency report on their web site, containing information required pursuant to article 40 of the Directive or which complies with equivalent disclosure obligations.

 Article 11
(Application for registration)

1. The application for registration in Section B of the Special Register shall be submitted to Consob using Form B attached herewith, signed by the third country auditor or the duly appointed legal representative of third country audit entity.

2. The application shall contain:

a) the name, address and contact details of the third country auditor or the name, legal status and contact details of the third country audit entity;

b) identification and contact details of all offices responsible for audit reports pursuant to article 34, subsection 1, Italian Legislative Decree no. 39 of 27 January 2010;

c) the name of the network of which the applicant is a member, if any, and, as an attachment, the description of the network taking into account the definition of a network pursuant to article 2, paragraph 7 of the Directive;

d) registration details of the applicant as auditor or audit entity in its home country and indication of the Authority responsible for that registration;

e) an indication of the existence of any prior rejects of registration applications or withdrawn orders of the applicant as auditor or audit entity in the home country;

f) details of any registration of the applicant as third country auditor or audit entity in another member state of European Union or the European Economic Area;

g) details of any registration of the applicant in compliance with Chapters II and III of the Directive in another member state of European Union or the European Economic Area;

h) an indication of any pending registration applications in another member state of European Union or the European Economic Area;

i) the names, professional qualifications and contact details of each member of the administrative and management body of the third country audit entity;

j) an indication whether the majority of the members of the administrative or management body of the third country audit entity meets requirements pursuant to articles 6, 7, 8, 9 and 10 of the Directive;

k) the list of relevant audit clients according to article 34, subsection 1, Italian Legislative Decree no. 39 of 27 January 2010;

l) the names of auditors responsible for carrying out audits of clients pursuant to paragraph k), registration details of them as auditors in their home country and an indication as to whether such persons meets requirements equivalent to those established in articles 6, 7, 8, 9 and 10 of the Directive;

m) an indication of the auditing standards the applicant applies in carrying out the audits for clients pursuant to paragraph k) and, in the absence of auditing standards established in article 26 of the Directive, an indication of whether the audits were carried out in compliance with International Standards of Auditing (ISA) issued by the International Federation of Accountants (IFAC) or equivalent standards. In the latter case, a declaration must be attached confirming equivalence of the auditing standards adopted with those of the ISA;

n) an indication of the independence standards and rules the applicant applies and, in the absence of equivalence decision pursuant to article 45, paragraph 6, of the Directive, an indication of whether the audits were carried out in compliance with independence principles contained in Section 290 of the IFAC Code of Ethics for Professional Accountants adopted by the International Federation of Accountants or equivalent principles. In the latter case, a declaration must be attached confirming equivalence of the independence principles adopted with those of the IFAC;

o) an indication as to whether in the last twelve months third country auditors or audit entities have published on their web site the annual transparency report, including information equivalent to that required under article 40 of the Directive, or whether such publication is planned in the three months following closure of the applicant's financial year;

p) the certification pursuant to article 13 provided by the third country auditor or by the persons identified in paragraphs i) and l) in the case of third country audit entity;

q) the list of attachments to the application.

3. In an application pursuant to subsection 1, the applicant has the option to indicate whether and when the last external quality assurance review was conducted and identification details of the Authority responsible for the external quality assurance review. If external quality assurance review has been conducted, necessary information about the outcome, the main shortcomings and the main measures the applicant has undertaken to address the shortcomings shall be attached.

4. Article 6, subsection 3, shall apply.

 Article 12
(Examination of the application)

1. Applications submitted by third country auditors or audit entities pursuant to article 11, subsection 1, the provisions of article 7 shall apply.

2. In addition to the information indicated in article 7, subsection 1, Consob may request further information from the applicant.

 Article 13
(Documentation on integrity requirements)

1. With regard to integrity requirements, third country auditors and natural persons identified in article 11, paragraphs i) and l) shall provide certification issued by the relevant authority in the country of residence stating that the interested party has not been subject to measures corresponding to those resulting in a loss of integrity requirements as established by article 8 of Italian Legislative Decree no. 88 of 27 January 1992. The certificates must be accompanied by a legal opinion, issued by a person authorised to exercise the legal profession in the country of residence, confirming the suitability of the confirmation certificates in question.

2. If laws in the country of residence do not envisage the issue of such certificates, each interested party shall produce a replacement declaration and the aforementioned legal opinion shall confirm that in that country the issue of certificates in place of the declaration is not envisaged.

3. Documents confirming possession of the integrity requirements must be issued no earlier than six months prior to submission of the application.

 Article 14
(Cancellation)

1. Consob shall cancel a third country auditor or audit entity from Section B where it is found that:

a) information requested by Consob for the purpose of its duties related or instrumental to keeping the Section of the Register has not been notified;

b) one of the conditions indicated in article 10 is no longer met;

c) the registration in the home country as auditor or audit entity has been cancelled.

 Article 15
(Final provisions)

1. The provisions adopted under this resolution shall be valid until the date of entry into force of the regulations pursuant to article 34, subsection 7, Italian Legislative Decree no. 39 of 27 January 2010.

2. This resolution is to be published in Consob's Bulletin and in the Italian Official Gazette. It shall enter into force on the day after publication in the Official Gazette.

Annex 1[7]

List of third countries to which the transitional period governed by the European Commission Decision of 19 January 2011 applies

• Abu Dhabi
• Bermuda
• Brazil
• The Cayman Islands
• The Dubai International Financial Centre
• Egypt
• Guernsey
• Hong Kong
• India
• Indonesia
• The Isle of Man
• Israel
• Jersey
• Malaysia
• Mauritius
• New Zealand
• Russia
• Taiwan
• Thailand
• Turkey

Annex 2[8]

List of third countries for which the European Commission Decision of 19 January 2011 has declared that the public oversight , quality assurance investigation and penalty systems for auditors and audit entities are equivalent.

• Australia
• Canada
• China
• Croatia
• Japan
• Singapore
• South Africa
• South Korea
• Switzerland
• United States of America (this will cease to apply on 31 July 2013)

FORM A

FOR REGISTRATION OF THIRD COUNTRY AUDITORS AND AUDIT ENTITIES PURSUANT TO ARTICLE 34, SUBSECTION 1, ITALIAN LEGISLATIVE DECREE No. 39 OF 27 JANUARY 2010, IN COMPLIANCE WITH ARTICLE 2 OF THE EUROPEAN COMMISSION DECISION OF 19 JANUARY 2012

This Form A is used to submit applications to Consob for registration in Section A of Special Register of Audit Firms held by Consob.

1 Applicant identification details

1.A Identification details of the third country auditor
(to be completed if the audit engagement is conferred upon a natural person)

1,1 Name and surname
1,2 Date of birth
1,3 Address
1,4 Town/City
1,5 Postcode
1,6 Country
1,7 Telephone number, including country and area codes
1,8 Fax number, including country and area codes
1,9 E-mail address
1.10 Web site address

1.B Identification details of third country audit firm
(to be completed if the audit engagement is conferred upon an entity)

1,11 Entity name
1,12 Legal status
1,13 Address
1,14 Town/City
1,15 Postcode
1,16 Country
1,17 Telephone number, including country and area codes
1,18 Fax number, including country and area codes
1,19 E-mail address
1.20 Web site address
Details of the legal representative of the third country audit entity, for contact purposes
1,21 Name and surname
1,22 Address
1,23 Town/City
1,24 Postcode
1,25 Country
1,26 Telephone number, including country and area codes
1,27 Fax number, including country and area code
1,28 E-mail address

2 Network membership, taking into account the definition of a network pursuant to article 2, paragraph 7 of the Directive
(to be completed if the applicant belongs to a network)

2,1 Name of the network
2,2 Description of the network or, alternatively, a link to a description of the network on a web site
(to be provided as an attachment)

3 Registration of the applicant as auditor or audit entity in the home country
Identification details of the Authority responsible for the registration

3,1 Name of the Authority
3,2 Address
3,3 Town/City
3,4 Postcode
3,5 Country
3,6 Telephone number, including country and area code
3,7 Fax number, including country and area code
3,8 Registration details as auditor or audit entity in the home country

4 Registration(s) of the applicant as third country auditor or audit entity in another member state of the European Union or the European Economic Area
(to be completed if the applicant is registered or registration is pending)

4,1 List of registrations as third country auditor or audit entity in another member state of the European Union or the European Economic Area
(for each registration, an attachment must provide details of the registration, identification details of the Authority responsible for the registration and the country in question)
4,2 List of registrations pending as third country auditor or audit entity in another member state of the European Union or the European Economic Area
(for each registration pending, an attachment must provide details of the registration application, identification details of the Authority to which the application was submitted and the country in question)

5 Registration(s) of the applicant in compliance with Chapters II and III of the Directive in another member state of the European Union or the European Economic Area
(to be completed if the applicant is registered or registration is pending)

5,1 List of registrations in compliance with Chapters II and III of the Directive in another member state of the European Union or the European Economic Area
(for each registration, an attachment must provide details of the registration, identification details of the Authority responsible for registration and the country in question)
5,2 List of registrations pending in compliance with Chapters II and III of the Directive in another member state of the European Union or the European Economic Area
(for each registration pending, an attachment must provide details of the registration application, identification details of the Authority to which the application was submitted and the country in question)

6 Internal quality control system of third country audit entity

6,1 Description of the internal quality control system of the third country audit entity, for example a system designed in accordance with the International Standard on Quality Control, ISQC1
(to be provided as an attachment)

7 External quality assurance review
(to be completed only if the applicant has been subject to an external quality assurance review)

Identification details of the Authority responsible for the most recent external quality assurance review
7,1 Name of the Authority
7,2 Address
7,3 Town/City
7,4 Postcode
7,5 Country
7,6 Telephone number, including country and area code
7,7 Fax number, including country and area code
7,8 Start and end date of the most recent external quality assurance review
7,9 Necessary information about the outcome of the most recent external quality assurance review, the main shortcomings and the main measures the applicant has undertaken to address the shortcomings
(to be provided as an attachment with a full copy, where possible, of the report issued by the Authority responsible for the external quality assurance review)

8 Relevant audit clients according to article 34, subsection 1, Italian Legislative Decree no. 39 of 27 January 2010
List of relevant audit clients according to article 34, subsection 1, Italian Legislative Decree no. 39 of 27 January 2010
(to be provided as an attachment, indicating the identification details of the issuer and the EU member states in which the security is admitted to trading on a regulated market)

9 Auditing standards and independence standards and rules the applicant applies in carrying out the audits for clients pursuant to point 8

9,1 Auditing standards the applicant applies in carrying out the audits for clients pursuant to point 8
9,2 Independence standards and rules the applicant applies in carrying out the audits for clients pursuant to point 8

10 List of attachments to the application