The government notes this recommendation. Clause 27 of the FSM Bill (which will insert new sections 3RC and 3RD into FSMA) introduces a power for the Treasury to require a regulator to review its rules. This power is designed to be used only in exceptional circumstances where the Treasury considers that it is in the public interest to direct the regulators to review their rules, for example, where there has been a significant change in market conditions, or other evidence suggests that the relevant rules are no longer acting as intended. The rule review power also responds to concerns from stakeholders who considered that there were few avenues available to challenge regulators’ rules. Any reviews initiated under the power will be conducted by the regulators or, where appropriate, an independent person. The regulator will be responsible for taking any action it deems appropriate in response to any recommendations arising from the review. The government considers that the rule review power offers an important avenue for scrutiny of the regulators’ rulemaking where required, while still maintaining the operational independence of the regulators to set detailed regulatory standards that apply to firms. The government notes the committee’s recommendation that the Treasury funds reviews conducted under this power. The FSM Bill includes a requirement for the Treasury to ‘have regard’ to the desirability of minimising the impact of a direction on the regulator’s other functions before directing the regulator to undertake a review.