4.1 In carrying out its policy making functions, the PRA is required to comply with several legal obligations. Before submitting a standards instrument to HM Treasury for approval, the Financial Services and Markets Act 2000 (FSMA) [Section 138J of FSMA.] requires the PRA to publish a draft of the proposed technical standards accompanied by:

• a cost benefit analysis;

• an explanation of the PRA's reasons for believing that making the proposed technical standards is compatible with the PRA's duty to act in a way that advances its general objective, [Section 2B of FSMA.] insurance objective [Section 2C of FSMA.] (if applicable), and secondary competition objective; [Section 2H(1) of FSMA.]

• an explanation of the PRA's reasons for believing that making the proposed technical standards are compatible with its duty to have regard to the regulatory principles; [Sections 2H(2) and 3B of FSMA.] and

• a statement as to whether the impact of the proposed technical standards will be significantly different to mutuals than to other persons. [Section 138K of FSMA.]