284.This section imposes consultation requirements on the Authority when it proposes to exercise its rule-making powers.  Generally, draft rules issued for consultation must, as a result of subsection (2), be accompanied by a cost-benefit analysis of the proposals, an explanation of the purpose of the proposed rules and a statement that representations about the Authority’s proposals may be made to the Authority within a specified time.  They must also be accompanied by a statement of the Authority’s reasons for believing that the proposed rules are compatible with its objectives.
285.Subsection (4) provides that the Authority must have regard to representations made to it when consulting on proposals to make rules.  Subsections (5) and (6) provide that if the Authority decides to make the rule, it must give a feedback statement on the representations it received.  If the rules which are introduced differ significantly from those which the Authority consulted on, the Authority must publish a statement of that fact, together with a cost-benefit analysis concerning the new provisions.
286.The Authority does not have to prepare a cost-benefit analysis when it considers that its proposals will not result in a material increase in costs.  It would, however, still need to consult on the content of the proposed rules. Also, where the Authority proposes to exercise its powers to charge fees, the requirement to produce a cost-benefit analysis does not apply but the Authority is required to consult on the proposed expenditure which would result from the fee-raising exercise.  Part III of Schedule 1 contains further provisions regarding the Authority’s fee-raising powers.
287.Consultation requirements will not apply if the Authority considers that any delay resulting from the consultation would harm consumers.
Commentary on Sections Part X: Rules and Guidance Chapter I: Rule-Making Powers Section 155: Consultation