Clause 40

Despite any other provision of this Act or any other written law, every licensed trade repository must —

on an annual basis, appoint an auditor and obtain the approval of the Authority to such appointment; and (b)where, for any reason, the auditor ceases to act for the licensed trade repository, as soon as practicable thereafter, appoint another auditor and obtain the approval of the Authority to such appointment. (2) An auditor must not be approved by the Authority as an auditor for a licensed trade repository unless the auditor is able to comply with such conditions in relation to the discharge of an auditor’s duties as the Authority may determine.(3) The Authority may appoint an auditor for a licensed trade repository if —

the licensed trade repository fails to appoint an auditor in accordance with subsection (1); or

the Authority considers it desirable that another auditor should act with an auditor for the licensed trade repository appointed under subsection (1),and may at any time fix the remuneration to be paid by the licensed trade repository to that auditor.(4) The duties of an auditor appointed under subsections (1) and (3) are —

to carry out, for the year in respect of which the auditor is appointed, an audit of the accounts of the licensed trade repository; and

to make a report in respect of the latest financial statements of the licensed trade repository or, where the licensed trade repository is a parent company for which consolidated financial statements are prepared, the consolidated financial statements, in accordance with section 207 of the Companies Act 1967.(5) The Authority may, by written notice, impose all or any of the following duties on an auditor in addition to those in subsection (4):

a duty to submit to the Authority such additional information in relation to the auditor’s audit as the Authority considers necessary;

a duty to enlarge or extend the scope of the auditor’s audit of the business and affairs of the licensed trade repository;

a duty to carry out any other examination or establish any procedure in any particular case;

a duty to submit to the Authority a report on any of the matters mentioned in paragraphs (b) and (c).(6) An auditor to whom a notice is given under subsection (5) must comply with each direction specified in the notice.(7) The licensed trade repository must remunerate the auditor in respect of the discharge by the auditor of the duties mentioned in subsection (5).(8) Despite any other provision of this Act or the provisions of the Companies Act 1967, the Authority may, if it is not satisfied with the performance of any duty by an auditor of a licensed trade repository, at any time —

direct the licensed trade repository to remove the auditor; and (b)direct the licensed trade repository to appoint another auditor approved by the Authority, as soon as practicable after the removal, and the licensed trade repository must comply with such direction.(9) If an auditor discloses in good faith to the Authority any information mentioned in subsection (5)(a) or report mentioned in subsection (5)(d), the disclosure is not to be treated as a breach of any restriction on the disclosure imposed by any law, contract or rules of professional conduct, and the auditor is not liable for any loss arising from the disclosure or any act or omission as a result of the disclosure.(10) A licensed trade repository that contravenes subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $100,000 and, in the case of a continuing offence, to a further fine not exceeding $10,000 for every day or part of a day during which the offence continues after conviction.(11) A licensed trade repository that fails to comply with a direction under subsection (8) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $250,000 and, in the case of a continuing offence, to a further fine not exceeding $25,000 for every day or part of a day during which the offence continues after conviction.(12) Any auditor who fails to carry out any duty mentioned in subsection (4), or who fails to comply with subsection (6), shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $100,000 and, in the case of a continuing offence, to a further fine not exceeding $10,000 for every day or part of a day during which the offence continues after conviction.Auditors of licensed trade repositories to report certain matters and irregularities to Authority46XA.—

If an auditor of a licensed trade repository, in the course of performing the auditor’s duties mentioned in section 46X(4) or (5), becomes aware of any matter or irregularity mentioned in the following paragraphs, the auditor must immediately send to the Authority a written report of that matter or irregularity:

any matter that, in the auditor’s opinion, adversely affects or may adversely affect the financial position of the licensed trade repository to a material extent;

any matter that, in the auditor’s opinion, constitutes or may constitute a breach of any provision of this Act or an offence involving fraud or dishonesty;

any irregularity that has or may have a material effect upon the accounts of the licensed trade repository, including any irregularity that affects or jeopardises, or may affect or jeopardise, the funds or property of investors.(2) An auditor of a licensed trade repository is not, in the absence of malice on the auditor’s part, liable to any action for defamation at the suit of any person in respect of any statement made in the auditor’s report under subsection (1).(3) Subsection (2) does not restrict or affect any right, privilege or immunity that the auditor of a licensed trade repository may have, apart from this section, as a defendant in an action for defamation.Power of Authority to appoint auditor to examine and audit books of licensed trade repository46XB.—

Where —

a licensed trade repository is required under section 46M to submit to the Authority an auditor’s report but fails to do so; or

the Authority receives a report under section 46XA(1),the Authority may, without affecting its powers under section 46X, if it is satisfied that it is in the interests of the licensed trade repository, the participants of the licensed trade repository or the general public to do so, appoint in writing an auditor to examine and audit (either generally or in relation to any particular matter) the books of the licensed trade repository.(2) Where the Authority is of the opinion that the whole or any part of the costs and expenses of an auditor appointed by the Authority under subsection (1) should be borne by the licensed trade repository, the Authority may, in writing, direct the licensed trade repository to pay a specified amount, being the whole or part of such costs and expenses, within such time and in such manner as may be specified in the direction.(3) Where a licensed trade repository fails to comply with a direction under subsection (2), the amount specified in the direction may be sued for and recovered by the Authority as a civil debt.(4) An auditor appointed under subsection (1) must, on the conclusion of the examination and audit, submit a report to the Authority.Restriction on auditor’s and employee’s right to communicate certain matters46XC. Except as may be necessary for carrying into effect the provisions of this Act or so far as may be required for the purposes of any legal proceedings (whether civil or criminal), an auditor who is carrying out any duty imposed under section 46X(5) or who is appointed under section 46XB, or any employee of such auditor, must not disclose any information which may come to his or her knowledge or possession in the course of performing his or her duties as such auditor or employee (as the case may be) to any person other than —

the Authority;

in the case of an employee of such auditor, the auditor; and

any other person authorised by the Authority in writing to receive such information.”.