Clause 46

Despite any other provision of this Act or any other written law, every approved clearing house 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 approved clearing house, 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 an approved clearing house 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 an approved clearing house —

if the approved clearing house fails to appoint an auditor in accordance with subsection (1); or

if the Authority considers it desirable that another auditor should act with an auditor for the approved clearing house appointed under subsection (1),and may at any time fix the remuneration to be paid by the approved clearing house 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 approved clearing house; and

to make a report in respect of the latest financial statements of the approved clearing house or, where the approved clearing house 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 approved clearing house;

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 approved clearing house 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 an approved clearing house, at any time —

direct the approved clearing house to remove the auditor; and (b)direct the approved clearing house to appoint another auditor approved by the Authority, as soon as practicable after the removal, and the approved clearing house 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) An approved clearing house 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) An approved clearing house 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 approved clearing houses to report certain matters and irregularities to Authority73A.—

If an auditor of an approved clearing house, in the course of performing the auditor’s duties mentioned in section 73(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 approved clearing house 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 approved clearing house, including any irregularity that affects or jeopardises, or may affect or jeopardise, the funds or property of investors.(2) An auditor of an approved clearing house 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 an approved clearing house 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 approved clearing house73B.—

Where —

an approved clearing house is required under section 62 to submit to the Authority an auditor’s report but fails to do so; or

the Authority receives a report under section 73A(1),the Authority may, without affecting its powers under section 73, if it is satisfied that it is in the interests of the approved clearing house, the participants of the approved clearing house 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 approved clearing house.(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 approved clearing house, the Authority may, in writing, direct the approved clearing house 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 an approved clearing house 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 matters73C. 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 73(5) or who is appointed under section 73B, 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.”.