The MFSA has issued a consultation document on proposed amendments to the listing rules in order to reflect the directive 2006/43/EC on statutory audits of annual accounts and consolidated accounts. Below is a summary of the proposed amendments:

  • Audit Committee Composition and Functions: 
    • The Audit Committee's composition is to be restricted to non-executive directors (the LRs currently require the committee to be composed of a majority of non-executive directors); 
    • The Chairman is to be independent from the Issuer and must be appointed by the members of the committee (presently the practice is that the chairman of the committee is appointed by the board of directors);
    • The committee must have competence relevant to the sector of the Issuer's operations (the LRs are presently silent on this matter). 
    • The amendments propose additional functions to the committee, in particular in relation to the integrity of financial reporting and selection process for the selection of the statutory auditors. 

  • Options / Derogations
    • The MFSA has opted not to apply the options available in Article 11(2), Article 16(8) and  39(1), (2), (4) and (5) of the directive. 
    • The MFSA has utilised the option to allow the committee to disclose the additional report to third parties to execute its functions. 
For further information on the consultation document, please click here