New policy rule for assessing the fitness of policy makers of audit firms

The reason for the new policy rule is an amendment to the Wta, which extends the fitness requirement from policy makers of Public Interest Entity (PIE) audit firms to policy makers of the largest audit firms holding a regular licence to perform statutory audits. Both the legislative amendment and the policy rule are expected to enter into force on 1 January 2027.

Amendment Act extends fitness requirement to the largest regular audit firms

The Amendment Act for the audit sector extends the fitness requirement to policy makers of the largest audit firms holding a regular licence to perform statutory audits. Until now, this requirement applied only to policy makers of PIE audit firms. The extension applies to audit firms holding a regular licence that, for three consecutive financial years, generate at least €3 million in revenue from statutory audits and perform at least 150 statutory audits annually. As a result, the AFM will replace the current Policy Rule on Fitness under the Wta with the new Policy Rule on Fitness under the Wta 2027. In addition, the policy rule has been aligned more closely with the AFM and DNB Joint Policy Rule on Fitness 2012 applicable to financial institutions.

Additional clarification following consultation

Stakeholders were invited to respond to the draft policy rule. The AFM received seven consultation responses. Based on this feedback, several parts of the policy rule have been clarified. For example, the policy rule and the accompanying explanatory notes now provide further guidance on the moments at which the fitness of policy makers will be assessed. In addition, the provisions relating to assurance engagements concerning sustainability reporting have been revised. The consultation version referred to requirements stemming from the Dutch legislation implementing the Corporate Sustainability Reporting Directive (CSRD). As it remains uncertain whether this legislation will already be in force when the policy rule takes effect, these passages have been reformulated in more general terms and no longer refer specifically to requirements arising from that legislation.

The consultation responses are summarised in the accompanying feedback statement, which also explains how the AFM has taken stakeholders' comments into account.

Entry into force

The AFM intends for the policy rule to enter into force on 1 January 2027, simultaneously with the expected entry into force of the Amendment Act for the audit sector. Before that date, the policy rule will be published in the Dutch Government Gazette (Staatscourant).