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Audit Inspections Unit

Which clients fall under the definition of PIEs (‘public-interest entities’)?

  •  Public interest entities are defined  per EU Directive 2014/56/EC.

     

    The definition states that public interest entities mean:

     

    1. entities governed by the law of a Member State whose transferable securities are admitted to trading on a regulated market of any Member State within the meaning of point 14 of Article 4(1) of Directive 2004/39/EC;

     

    1. credit institutions as defined in point 1 of Article 3(1) of Directive 2013/36/EU of the European Parliament and of the Council, other than those referred to in Article 2 of that Directive; or

     

    1. insurance undertakings within the meaning of Article 2(1) of Directive 91/674/EEC;

Do branches fall under the definition of PIEs?

  • Branches of PIEs do not normally fall under the definition of PIEs in themselves, as they do not have a legal personality, see EU Commission FAQs.

I have a client who appears to meet the definition of PIE, but whose parent is incorporated outside

  • It depends, any client (e.g. a subsidiary) who meets the definition of public interest entity and whose audit is carried out in Ireland is a PIE. If the client group contains a PIE incorporated within the EEA, your client (the subsidiary) may fall within the definition of PIE.  It is your responsibility to confirm that if this is the case or not.  

Do all listed entities clients fall under the PIE definition?

  • Any entity

    • whose transferable securities are admitted to trading on a regulated market of any Member State, whose audit (either group or component audit) is carried out in Ireland; and
    • who is governed by the law of a member state;

    is defined as a PIE. However if the transferable securities are only listed on a regulated exchange outside of the EEA it does not fall under the PIE definition. Also important is where the is entity is incorporated. If the entity is incorporated outside of the EEA it is unlikely to fit the criteria of ‘entities governed by the law of a Member State’ and therefore falls out of scope of PIEs.

My client, who is an EEA entity, whose transferable securities are admitted to trading on an EU regu

  • Yes, irrespective of whether the securities are actively traded or not, the entity meets the definition of a PIE by having transferable securities which are admitted to trading on an EU regulated market (as well as governed by the law of a member state).

The entity’s debt is listed on GEM (Global Exchange Market operated by Irish Stock Exchange), is it

  • GEM is not included in the regulated market listing as compiled by the European Securities and Markets Authority (ESMA). Any entity with debt solely listed on GEM does not fall under the PIE definition (unless it is captured in one of the other PIE definitions e.g. a credit institution).

Are the Transparency Directive (Directive 2013/50/EU, Art. 1 Par. 6 amending Directive 2004/104/EC)

  • Under the rules of the Transparency Directive (Directive 2013/50/EU, Art. 1 Par. 6 amending  Directive 2004/104/EC) if an issuer whose securities are admitted to trading on a regulated market only issues exclusively listed debt in denominations of at least  €100,000 (€50,000 if debt is listed before 31 December 2010) it is exempt from the Transparency Directive reporting requirements. Under Directive 2014/56/EC, the definition of PIEs does not allow for any exemption for entities with exclusively listed debt in denominations of at least €100,000 (or denominations of at least €50,000 if the debt is listed before 31 December 2010).

Do Irish Collective Asset-management Vehicles (ICAVs) fall under the PIE definition?

  • Similar to other fund vehicles, if the ICAV is listed on a regulated market e.g. the main securities market of the Irish stock exchange fall under the PIE definition.

Are credit unions PIEs?

  • Article 2 of Directive 2013/36/EU where the definition of ‘credit institution’ (in respect of the current PIEs definition) originates from, specifically removes Irish credit unions as an entity type bound by the same Directive. This in turn is interpreted as exempting Irish Credit Unions from the PIEs (as defined in Directive 2014/56/EC) classification of b) ‘Credit Institution’.

The audit firm audits an Insurance Undertaking that is operated under a Freedom of Service basis (as

  • If you are auditing a component that is not itself a legal entity, it is unlikely to be a PIE.

Are captives (as defined in Section 3, Art. 13 (2) of DIRECTIVE 2009/138/EC (Solvency II)) public in

  • Captives (as defined in Section 3, Art. 13 (2) of DIRECTIVE 2009/138/EC) fall under the definition of ‘insurance undertaking’, as detailed in Recital 10 of same directive, which brings them under the PIE definition.

Can a competent authority (as defined in Reg. 4 of S.I. No. 312 of 2016) from outside the state requ

  • A competent authority from outside the state would not normally contact individual audit firms in relation to audit inspections. If you are contacted by a competent authority (supervisory body) from outside of the state please contact the Audit Inspections Unit.