(1) Section 1229 of the Companies Act 2006 (supervision of Auditors General by the Independent Supervisor) is amended as follows.

(2) For subsection (2) substitute -

"(2) The Independent Supervisor must discharge that duty by -

(a) establishing supervision arrangements itself, or

(b) entering into supervision arrangements with one or more bodies.

(2A) If the Independent Supervisor enters into supervision arrangements with one or more bodies, it must oversee the effective operation of those supervision arrangements.".

(3) In the opening words of subsection (3) -

(a) after "are arrangements" insert "established by the Independent Supervisor or";

(b) after "in accordance with which" insert "the Independent Supervisor or";

(c) omit "one or more of".

(4) After subsection (3) insert -