Chapter 3: Accountability of regulators FCA and PRA powers to make rules etc Section 31: Matters to consider when making rules
This section inserts new Section 138EA into FSMA 2000.
	Within this, subsection (1) of new Section 138EA states that this section applies to all regulator rule-making empowerments within FSMA 2000, meaning that it is applicable whenever a regulator proposes to make rules in or under the Act. It therefore has the same scope as new Section 3RE, as inserted by section 30.
	138EA(2) and (3) provide HM Treasury with a power to specify matters that the regulators must have regard to when making rules in a particular area. HM Treasury is able to specify different matters that must be considered when rules are made in different areas.
	138EA(4) enables HM Treasury to limit the matters which must be considered such that it can apply to only a subset of regulator rule-making, including by references to the power exercised by the regulator, the persons to whom the rules apply, or the activities or subject matter concerned.
	138EA(5) provides an exemption to the consideration of matters specified by HM Treasury where rules are made in order to comply or act in accordance with a direction or recommendation made by the Financial Policy Committee of the Bank of England.
	138EA(6) is self-explanatory.
	Subsection (3) of this section inserts a number of provisions into section 138I of FSMA 2000.
	Subsection (3)(a) inserts new subsection 138I(2)(ba) which places a requirement on the FCA to include within a consultation an explanation of the how the consideration of matters specified by HM Treasury using the power in 138EA has affected the draft rules proposed in their consultation.
	Subsection (3)(b) inserts new subsection 138I(8A) which exempts the FCA from complying with the requirement in new subsection 138I(2)(ba) if compliance would cause an undue delay which would be damaging to consumer interests or if the proposed rules make changes to pre-existing rules that are non-material in the opinion of the FCA. The new subsection 138I(8B) is self-explanatory.
	Subsection 4 inserts a number of provisions into 138J of FSMA 2000.
	Subsection (4)(a) inserts new subsection 138J(2)(ba). This has the same effect on the PRA’s consultation requirement as new subsection 138I(2)(ba) has on the FCA’s consultation requirements.
	Subsection (4)(b) inserts new subsection 138J(8A). This exempts the PRA from complying with the requirement in new subsection 138J(2)(ba) if compliance would cause an undue delay. The conditions that this exemption is subject to in 138J(8A)(a)(i) and 138J(8A)(a)(ii) are based on the PRA’s statutory objectives. The new subsection 138J(8A)(b) exempts the PRA from the requirement in new subsection 138J(2)(ba) if the proposed rules make changes to pre-existing rules that are non-material in the opinion of the PRA. The new subsection 138J(8B) is self-explanatory.
	Subsection (5) inserts new section 138EA into section 429 of FSMA 2000 which provides that SIs made under this power are subject to the affirmative Parliamentary procedure.