(1) Schedule 12 to the Act (Arrangements in which Registered Third Country Auditors are required to Participate) is amended as follows.

(2) In paragraph 2 [Paragraph 2 was amended by S.I. 2007/3494, regulation 33(1) and (4).] (arrangements for independent investigations for disciplinary purposes), for sub-paragraph (1) substitute -

"(1) The arrangements referred to in section 1242(1)(b) are appropriate arrangements -

(a) for the carrying out of investigations into matters arising in connection with the performance of functions related to the audit of UK-traded non-EEA companies by the registered third country auditor,

(b) where it appears to be desirable following the conclusion of such investigations -

(i) for the holding, subject to sub-paragraph (1A), of disciplinary hearings relating to the registered third country auditor,

(ii) unless the interests of justice otherwise require, for any such hearings to be held in public, and

(iii) for decisions to be made as to whether (and, if so, what) disciplinary action should be taken against the registered third country auditor, and

(c) for ensuring that the carrying out of those investigations, the holding of those hearings and the making of those decisions are done independently of the registered third country auditor.