Had a really interesting chat about RegTech the other day. We were debating how regulators have changed in recent times, not just in encouraging start-ups and innovation, but it looking forward rather than backward.
For most of the time that I’ve dealt with financial services, regulators have always been in catch-up mode. They regulate what they see happening or that recently happened; they1 never regulated what’s coming and rarely regulated to determine changed behaviours with technology that they wanted to see happen in the future. You may say that things like RegNMS and MiFID created new behaviours like high frequency trading, but the motivation for MiFID was to create pan-European equities trading and eradicate the national concentration rules that allowed national stock exchanges to dominate the scene. Similarly, the big rulesets like Dodd-Frank and EMIR, PSD and others, were more to address known issues in the markets that had come to light, than create new markets.
