204Costs of compliance
(1)In Schedule 2 to the [1986 c. 60.] Financial Services Act 1986 (requirements for recognition of self-regulating organisations), after paragraph 3 insert—
“Taking account of costs of compliance
3AThe organisation must have satisfactory arrangements for taking account, in framing its rules, of the cost to those to whom the rules would apply of complying with those rules and any other controls to which they are subject.”;
and in Schedule 3 to that Act (requirements for recognition of professional body), after paragraph 3 insert—
“Taking account of costs of compliance
3AThe body must have satisfactory arrangements for taking account, in framing its rules, of the cost to those to whom the rules would apply of complying with those rules and any other controls to which they are subject.”.
(2)The additional requirements having effect by virtue of subsection (1) do not affect the status of a self-regulating organisation or professional body recognised before the commencement of that subsection; but if the Secretary of State is of the opinion that any of those requirements is not met in the case of such an organisation or body, he shall within one month of commencement give notice to the organisation or body stating his opinion.
(3)Where the Secretary of State gives such a notice, he shall not—
(a)take action to revoke the recognition of such an organisation or body on the ground that any of the additional requirements is not met, unless he considers it essential to do so in the interests of investors, or
(b)apply on any such ground for a compliance order under section 12 of the Financial Services Act 1986,
until after the end of the period of six months beginning with the date on which the notice was given.
(4)In Schedule 7 to the Financial Services Act 1986 (qualifications of designated agency), after paragraph 2 insert—
“Taking account of costs of compliance
2A(1)The agency must have satisfactory arrangements for taking account, in framing any provisions which it proposes to make in the exercise of its legislative functions, of the cost to those to whom the provisions would apply of complying with those provisions and any other controls to which they are subject.
(2)In this paragraph “legislative functions” means the functions of issuing or making statements of principle, rules, regulations or codes of practice.”.
(5)The additional requirement having effect by virtue of subsection (4) above does not affect the status of a designated agency to which functions have been transferred before the commencement of that subsection; but if the Secretary of State is of the opinion the requirement is not met in the case of such an agency, he shall within one month of commencement give notice to the agency stating his opinion.
(6)Where the Secretary of State gives such a notice, he shall not take action under section 115(2) of the [1986 c. 60.] Financial Services Act 1986 to resume any functions exercisable by such an agency on the ground that the additional requirement is not met until after the end of the period of six months beginning with the date on which the notice was given.
(7)References in this section to a recognised self-regulating organisation include a recognised self-regulating organisation for friendly societies and references to a designated agency include a transferee body (within the meaning of that Act).
In relation to such an organisation or body—
(a)references to the Secretary of State shall be construed as references to the Registrar (within the meaning of Schedule 11 to the Financial Services Act 1986), and
(b)the reference to section 12 of that Act shall be construed as a reference to paragraph 6 of that Schedule.