In FSMA 2000 after section 409A (inserted by section 32) insert—
(1)This section applies where it appears to a regulator that there is a material risk that a relevant action it proposes to take would be incompatible with an international trade obligation.
(2)The regulator must give written notice to the Treasury of the proposed action before proceeding to take it.
(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 function).
(5)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.
(6)Section 138M(1) (consultation: exemptions for temporary product intervention rules) is to be ignored for the purposes of subsection (5) in determining whether a duty to consult applies in respect of a relevant action.
(7)The requirement imposed by subsection (2) must be carried out before the duty to consult in respect of the relevant action is carried out.
(8)The requirement imposed by subsection (2) does 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 (9) is met,
(b)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 requiring macro-prudential measures), or
(c)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).
(9)The condition referred to in subsection (8)(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.
(10)Subsection (11) applies in a case where a notice under subsection (2) is not given because of subsection (3) or (8)(a).
(11)The regulator must give written notice to the Treasury of the relevant action it has taken as soon as reasonably practicable after taking it if it appears to the regulator that there is a material risk that the action is incompatible with an international trade obligation.
(12)In this section “international trade obligation” means an obligation of the United Kingdom that relates to financial services or markets under—
(a)a free trade agreement, as defined by section 5(1) of the Trade Act 2021, or
(b)the agreement establishing the World Trade Organisation signed at Marrakesh on 15 April 1994.”