(1) Paragraph 12 of Schedule 10 to the Companies Act 2006 (monitoring and enforcement) is amended as follows.

(2) For sub-paragraph (1) substitute -

"(1) The body must -

(a) have adequate resources for the effective monitoring and enforcement of compliance with its rules, and

(b) ensure that those resources may not be influenced improperly by the persons monitored.

(1A) The body must -

(a) have adequate arrangements for the effective monitoring and enforcement of compliance with its rules, and

(b) ensure that those arrangements operate independently of the persons monitored.".

(3) After sub-paragraph (2) insert -

"(3) The arrangements for enforcement must include provision for -

(a) sanctions which include -

(i) the withdrawal of eligibility for appointment as a statutory auditor; and

(ii) any other disciplinary measures necessary to ensure the effective enforcement of the body's rules; and