Registration of third-country audit entities
Third-country audit entities are subject to supervision by the AFM. These are audit entities that perform audits of the annual or consolidated accounts of companies incorporated in a third country, i.e. outside of the European Union (EU) or European Economic Area (EEA), whose transferable securities are admitted to trading on a regulated market in the Netherlands. These audit entities are required to register with the AFM. Registered third-country audit entities are subject to ongoing supervision by the AFM.
The European Commission assesses the status of audit supervision in third countries with the help of the European group of audit regulators. During this assessment a transitional period applies to the respective third countries. During the assessment period the AFM can, if necessary, carry out special incident-related or other investigations and enforcement actions. However it will not carry out any regular supervisory investigations.
If a third country has a system of supervision and enforcement that is equivalent to the system in the European Member States, the European Commission will take a so-called equivalence decision. Based on such an equivalence decision, the Minister of Finance can, by ministerial regulation on a reciprocal basis, fully or partially exempt certain third countries from supervision by the AFM. This is possible on the condition that the AFM has concluded a cooperation agreement with the relevant supervisory institution(s) on a reciprocal basis.