• GENE Part 9.7 GENE Part 9.7 Auditors [effective from 6th December 2009]

    • GENE 9.7.1 Section 9.7 additional to other provisions [effective from 6th December 2009]

      To remove any doubt, if an authorised firm is a limited liability company, limited liability partnership, or limited partnership, incorporated under any regulations, this part is additional to the provisions of any regulations (including any rules made or in force under any regulations) applying in relation to the firm as such a company or partnership.

      Editorial changes (as from 1st January 2016).

    • GENE 9.7.2 Appointment of auditor [effective from 6th December 2009]

      (1) An authorised firm that is a QFC entity must ensure that there is, at all times, an auditor appointed for the firm.
      (2) Before appointing an auditor (whether or not in replacement of another auditor and whether or not the appointment is at the direction of the Regulatory Authority), such a firm must apply to the authority for approval to appoint the proposed auditor.
      (3) The application must include statements:
      (a) that the firm is satisfied that the proposed auditor is eligible to be appointed as the firm's auditor under rule 9.7.3 (1); and
      (b) if the firm is a QFC entity — that the proposed appointment would not contravene rule 9.7.3A.
      (4) The Regulatory Authority must:
      (a) approve the appointment of the proposed auditor; or
      (b) refuse to approve the appointment of the proposed auditor.
      (5) The Regulatory Authority must give the authorised firm written notice of its decision on the application.
      (6) If the Regulatory Authority refuses to approve the appointment of the proposed auditor, the notice must:
      (a) give reasons for the decision; and
      (b) tell the authorised firm that it may appeal to the Regulatory Tribunal against the decision.
      (7) The authorised firm must not appoint the proposed auditor unless the Regulatory Authority has approved the appointment.
      (8) If the authorised firm appoints the proposed auditor, the firm must tell the Regulatory Authority about the appointment, and when it takes effect, immediately, but by no later than the second business day after the day the appointment is made.
      Amended by QFCRA RM/2018-1 (as from 1st May 2018).

    • GENE 9.7.3 Eligibility for appointment as auditor [effective from 6th December 2009]

      (1) An authorised firm must not appoint a person as auditor for the firm unless the person:
      (a) has consented in writing to the appointment being made;
      (b) has the skills, resources and experience necessary to audit the firm's business; and
      (c) has satisfied the firm that it and its relevant audit staff are:
      (i) independent of the firm; and
      (ii) not subject to any conflict of interest in relation to the firm.
      (2) The authorised firm must make and keep sufficient records to demonstrate that it complied with subrule (1) before the appointment was made.
      (3) The records must be kept for at least 6 years after the day the person ceases to be auditor for the authorised firm.
      Editorial changes (as from 1st January 2016).

    • GENE 9.7.3A GENE 9.7.3A Limit on term of auditor's appointment

      Subject to rule 9.7.3B (4), an authorised firm that is a QFC entity:

      (a) must not appoint a person as its auditor for a period longer than 5 years; and
      (b) must not re-appoint a person as its auditor if the re-appointment would result in the person's having been the firm's auditor continuously for longer than 5 years, unless at least 2 years has elapsed since the end of the person's last appointment as the firm's auditor.
      Inserted by QFCRA RM/2017-3 (as from 1st April 2017).

      • GENE 9.7.3A Guidance

        In general terms, the purpose of requiring rotation of firms' auditors is to ensure that auditors are independent of the firms they audit.

        Inserted by QFCRA RM/2017-3 (as from 1st April 2017).

    • GENE 9.7.3B Effect of group audit rotation arrangements

      (1) This rule applies in relation to an authorised firm that is a member of a group.
      (2) If the group has an arrangement for the rotation of auditors that the firm considers achieves the purposes of rule 9.7.3A, the firm must give the Regulatory Authority, in writing:
      (a) details of the arrangement; and
      (b) confirmation from the firm's governing body that the arrangement achieves the purposes of rule 9.7.3A.
      (3) If the authority is satisfied that the arrangement achieves the purposes of rule 9.7.3A, the authority must give the firm written notice to that effect.
      (4) Rule 9.7.3A does not apply to the firm while the notice is in effect.
      (5) The firm must notify the authority in writing of any change in the arrangement.
      (6) The authority may revoke a notice under subrule (3) if the authority considers that the arrangement no longer achieves the purposes of rule 9.7.3A (whether after receiving notification of a change or on any other basis).
      Insterted by QFCRA RM/2017-3 (as from 1st April 2017).

    • GENE 9.7.4 Direction to replace auditor [effective from 6th December 2009]

      (1) This rule applies if:
      (a) the Regulatory Authority considers that a person appointed as auditor for an authorised firm that is a QFC entity is not suitable to be, or to continue to be, auditor for the firm; or
      (b) the person's appointment contravened rule 9.7.3A.
      (2) The Regulatory Authority may, by written notice, direct the authorised firm to end the person's appointment as auditor and to appoint another auditor for the firm.
      (3) The authorised firm must comply with the direction within the period stated in the direction or, if no period is stated, within a reasonable period.
      (4) The Regulatory Authority must give the person a copy of the notice.
      (5) The notice must:
      (a) give, or be accompanied by, reasons for the direction; and
      (b) state that the authorised firm or person (or both) may appeal to the Regulatory Tribunal against the decision to give the direction.
      Amended by QFCRA RM/2018-1 (as from 1st May 2018).

    • GENE 9.7.5 Direction to appoint auditor [effective from 6th December 2009]

      (1) This rule applies if there is not, at any time, an auditor appointed for an authorised firm that is a QFC entity.

      Note See rule 9.7.6 for the duty of an authorised firm to notify the authority if the appointment of an auditor ends for any reason.
      (2) The Regulatory Authority may, by written notice, direct the authorised firm to appoint an auditor for the firm.

      Note The auditor must be appointed in accordance with rule 9.7.2 (Appointment of auditor).
      (3) The authorised firm must comply with the direction within the period stated in the direction or, if no period is stated, within a reasonable period.
      Amended by QFCRA RM/2018-1 (as from 1st May 2018).

    • GENE 9.7.6 Notification if appointment of auditor ends [effective from 6th December 2009]

      If the appointment of an auditor of an authorised firm ends for any reason, the firm must tell the Regulatory Authority immediately, but by no later than the second business day after the day the appointment ends:

      (a) that the appointment has ended; and
      (b) the reason for the appointment ending.

      Note For the obligation of the person to notify the Regulatory Authority if the person's appointment ends, FSR, article 91 (Resignation of auditors and actuaries).

      Editorial changes (as from 1st January 2016).