PRA has published a policy statement on implementing audit committee requirements under the revised Statutory Audit Directive to apply to financial years commencing on or after 17 June. In light of the responses received to PRA’s consultation on these requirements PRA has amended its proposals as follows:

  • the smallest firms can apply for a waiver or modification of the rules, having regard to the Directive minimum requirements;
  • PRA has introduced transitional arrangements for a period of two years; and
  • PRA has amended the independence of membership requirements for significant subsidiaries of parent undertakings in the EEA and also non-EEA. The requirement in the final rules is for a majority of, rather than all, the members of the subsidiary audit committee to be independent, including the chairman, provided that the audit committee of the subsidiary’s parent is comprised fully of independent non-executive directors.

It also includes the Rulebook instrument for CRR and Solvency 2 firms. As a consequence, PRA has updated its supervisory statement on internal governance to remove paragraphs on audit committees as the new instrument sets out the applicable rules. (Source: PRA finalises policy for implementing audit committee requirements and PRA updates internal governance supervision)