35.—(1) This paragraph applies where the Secretary of State has reason to believe that the regulator—
(a)has defaulted in performing any function and has not remedied the default, or
(b)is likely to default in performing any function.
(2) Where paragraph (1) applies, the Secretary of State must carry out an investigation in accordance with paragraphs (3) to (5).
(3) Unless the Secretary of State considers that it would not be in the public interest, the Secretary of State must inform the following of the investigation and the grounds for it, and invite them to make representations—
(a)the regulator,
(b)the Authority,
(c)any person or body affected, or likely to be affected, by the default, and
(d)any other person or body the Secretary of State considers appropriate.
(4) The Secretary of State must—
(a)review the facts and evidence, or
(b)appoint a person or body to review the facts and evidence and report to the Secretary of State, and
determine whether there has been, or is likely to be, a default by the regulator.
(5) Unless the Secretary of State considers that it would not be in the public interest, as soon as practicable after the determination referred to in paragraph (4) the Secretary of State—
(a)must notify the regulator of—
(i)the determination and the reasons for it, and
(ii)in the case of a determination that there has been, or is likely to be, a default by the regulator, the time within which the regulator may make representations to the Secretary of State, and
(b)may notify any other person who was informed of the investigation in accordance with paragraph (3), of the determination and the reasons for it.