Recital (6)

Article 45 of Directive 2006/43/EC requires the competent authorities of a Member State to register third-country auditors and audit entities issuing assurance reports on the sustainability information of third-country entities whose securities are admitted to trading on a regulated market in that Member State. The conditions for such registration concern the requirements to be met by the majority of the members of the administrative or management body of the third-country audit entity, the requirements to be met by the third-country auditor, the assurance standards to be used and the publication of an annual transparency report by the third-country audit entity. Moreover, Member States are to subject registered third-country auditors and audit entities to their systems of oversight, their quality assurance systems and their systems of investigation and penalties. Taking into account the current international landscape on the regulation of sustainability reporting and the assurance thereof, and considering that registration is necessary for the validity of the assurance reports within the Union, it would be disproportionate to require that those registration conditions be met in the first years of application of the sustainability assurance regime. In addition, the oversight of registered third-country auditors and audit entities is dependent on the existence of equivalence or adequacy decisions. Therefore, for a transitional period, simplified registration conditions and an exemption from oversight should be introduced for third-country auditors and audit entities issuing assurance reports on the sustainability information of third-country entities whose securities are admitted to trading on a regulated market in a Member State. The simplified registration should be possible on condition that certain information be provided to the competent authorities of the Member State concerned. The competent authorities should decline registration if that information is not provided.