Obligation to notify the proposed appointment of audit firms

This notification must be made before the selected audit firm is engaged. Notifications must also be made for reappointments.

Who is subject to the obligation to notify?

This obligation to notify was included in Article 393(1) of Book 2 of the Dutch Civil Code on 1 January 2013. The obligation does not apply to housing corporations (approved institutions) with more than 5,000 rental units. These PIEs are subject to Section 37 of the Housing Act.

The obligation to notify does apply to the following PIEs, as listed in Section 1(1)(I) of the Audit Firms Supervision Act and Article 1a of the Audit Firms Supervision Decree:

• a legal entity established in the Netherlands under Dutch law whose securities are admitted to trading on a regulated market, as defined in Section 1:1 of the Financial Supervision Act;

• a bank having its registered office in the Netherlands, as defined in Section 1:1 of the Financial Supervision Act, to which a licence has been issued under that Act;

• a central credit institution having its registered office in the Netherlands, as defined in Section 1:1 of the Financial Supervision Act, to which a licence has been issued under that Act;

• an insurer as defined in Section 1:1 of the Financial Supervision Act having its registered office in the Netherlands, not being a limited-risk insurer as defined in that section;

• large pension funds, as defined in Article 35a(5)(b) of the Pension Act and Occupational Pension Scheme (Obligatory Membership) Act Implementation Decree;

• grid operators, as defined in Section 1(1)(k) of the Electricity Act 1998 or Section 1(1)(e) of the Gas Act;

• the Royal Netherlands Academy of Arts and Sciences (KNAW), the Dutch Research Council (NWO) and the National Library of the Netherlands.

What must PIEs include in a notification?

The notification must contain the following information:

• the contact details of the person making the notification;

• the identifying details of the company;

• the name of the audit firm as specified in its articles of association and, if known, the name of the auditor whom the PIE intends to task with auditing the financial statements;

• the date by which the audit engagement is required (usually the date of the annual general meeting of shareholders or the date of the meeting of the Supervisory Board/audit committee);

• the financial year(s) for which the audit firm is being appointed.