(1) Schedule 10 (Recognised Supervisory Bodies) to the Act is amended as follows.

(2) In paragraph 3 (revocation of recognition), in sub-paragraph (1)(a), after "Part 2" insert "or 3".

(3) In paragraph 13 (monitoring of audits), for sub-paragraph (1)(b) substitute -

"(b) in the case of members of the body who perform any statutory audit functions in respect of major audits -

(i) participate in arrangements within paragraph 23(1); and

(ii) have rules and practices designed to ensure that a sanction determined under paragraph 23(1)(b) is to be treated as if it were a sanction which the body had determined under arrangements for enforcement within paragraph 12(1A);".

(4) In paragraph 23 (arrangements for independent monitoring of audits of listed companies and other major bodies), for sub-paragraph (1) substitute -

"(1) The arrangements referred to in paragraph 13(1)(b)(i) are appropriate arrangements -