Regulating by Numbers: The Trend Towards Increasing Empiricism in Enforcement Reporting by Financial Regulators

Abstract

This article discusses a trend towards increased empiricism in enforcement reporting by financial regulators that emphasises greater use of numerical indicators. The article examines how the Australian Securities and Investments Commission (ASIC), the UK Financial Conduct Authority (FCA) and the US Securities and Exchange Commission (SEC) report on the outcomes of their enforcement practices, with a particular focus on ASIC. The article begins with a brief introduction to the functions and structure of ASIC, the FCA and the SEC. It then describes how these regulators report on their enforcement outcomes and considers how recent national developments emphasising increased empiricism are likely to influence such reporting practices. Finally, the article provides a detailed case study on ASIC’s enforcement functions and quantitative approach to reporting of enforcement outcomes. The article closes by discussing what trends can be discerned regarding reporting of enforcement outcomes and what this could mean for regulators’ reporting practices in the future.

Keywords: financial regulators, enforcement, reporting, accountability, transparency

JEL Classification: G15, G18, K22, K42