(1)FSMA 2000 is amended as follows.
(2)In the italic heading before section 410, after “international” insert “powers and”.
(3)Before section 410 insert—
(1)This section applies where a regulator is proposing to take a relevant action.
(2)The regulator—
(a)must consider the effect of the relevant action on notified deference decisions, and
(b)if having done so it appears to the regulator that there is a material risk that the relevant action would be incompatible with a notified deference decision, must consult the Treasury about the likely effect of the action on the decision.
(3)Subsection (2) applies only if a duty to consult applies in respect of the taking of the relevant action.
(4)For the purposes of subsection (1) a regulator proposes to take a “relevant action” if—
(a)it proposes to make rules under this Act or any other enactment, or
(b)it proposes to make changes to its general policies and practices so far as relating to its supervisory functions under section 1L (FCA supervisory functions) or (as the case may be) section 2K (PRA supervisory functions).
(5)For the purposes of subsection (2)—
(a)“deference decision” means a decision of the Treasury that the law and practice of another country or territory is, so far as relating to financial services and markets, equivalent to the law and practice of the United Kingdom (either generally or as it relates to a particular matter);
(b)a deference decision is a “notified deference decision” if the Treasury have, by notice in writing, informed the regulator that it is relevant for the purposes of this section;
(c)a relevant action is “incompatible” with a notified deference decision if the action would result in the law and practice of the United Kingdom ceasing to be equivalent to the law and practice of the other country or territory to which the deference decision relates.
(6)For the purposes of subsection (3) a duty to consult applies in respect of a relevant action if—
(a)the duty imposed by section 138I or 138J to publish a draft of proposed rules applies in respect of the action, or
(b)any other duty (whether or not imposed by a provision of this Act) to publish the proposal to take the action in question applies.
(7)Section 138M(1) (consultation: exemptions for temporary product intervention rules) is to be ignored for the purposes of subsection (6) in determining whether a duty to consult applies in respect of a relevant action.
(8)The requirement imposed by subsection (2)(b) must be carried out before the duty to consult in respect of the relevant action is carried out.
(9)The requirements imposed by subsection (2) do not apply to the extent that the regulator takes a relevant action—
(a)by the making of product intervention rules under section 137D if the condition in subsection (10) is met,
(b)by the making of rules under Part 9C (see instead section 143G(3)),
(c)by the making of rules under Part 9D (see instead section 144C(3)),
(d)by the making of rules under Part 12B (see instead section 192XB(2)),
(e)in order to comply with a direction given by the Financial Policy Committee of the Bank of England under section 9H of the Bank of England Act 1998 (directions required macro-prudential measures), or
(f)in order to act in accordance with a recommendation made by that Committee under section 9Q of that Act (recommendations about the exercise of functions).
(10)The condition referred to in subsection (9)(a) is that the FCA considers it necessary not to comply with the requirement imposed by subsection (2) for the purpose of advancing—
(a)the consumer protection objective, or
(b)if an order under section 137D(1)(b) is in force, the integrity objective.”