After section 1240 (information to be made available to public), insert -

"CHAPTER 4A Equivalent Third Countries and Transitional Third Countries

1240A Power to approve third countries as equivalent or transitional third countries

(1) The Secretary of State may by regulations grant to a third country, or make provision for the grant to a third country of -

(a) approval as an equivalent third country,

(b) provisional approval, for a period of up to seven years, as an equivalent third country, or

(c) transitional approval, for a period of up to seven years, as a transitional third country,

in relation to the comparability of the third country’s audit regulatory regime to the audit regulatory regime of the United Kingdom.

(2) Regulations under subsection (1) may (among other things) -

(a) specify the procedure for assessing the audit regulatory regime of a third country;

(b) set out the considerations which must be taken into account, or may be taken into account, by the Secretary of State when determining -

(i) whether the third country has an audit regulatory regime comparable to that of the United Kingdom,

(ii) whether to grant approval, provisional approval or transitional approval, and