Dynamism in Financial Market Regulation: Harnessing Regulatory and Supervisory Technologies

ILE Working Paper No. 39

Accepted for publication in the Stanford Journal of Blockchain Law & Policy

21 Pages Posted: 2 Dec 2020 Last revised: 21 Mar 2021

See all articles by Pedro M. Batista

Pedro M. Batista

Institute of Law & Economics, University of Hamburg

Wolf-Georg Ringe

University of Hamburg - Institute of Law & Economics; University of Oxford - Faculty of Law; European Corporate Governance Institute (ECGI)

Date Written: August 31, 2020

Abstract

The dynamic development of market practices and services frequently limits regulatory effectiveness. New technologies, however, might assist regulators in better tracking market changes. While Regulatory Technology ("RegTech") has been vastly reducing compliance costs, Supervisory Technology ("SupTech") has the potential to enhance data accuracy even further. Proper integration between these two will assist regulators in obtaining a continuously updated picture of their regulatees and allow higher regulatory adaptability, without incurring extensive additional costs. Still, harnessing technology for regulatory purposes might lead to an increased dependence on technology providers which risks regulatory capture. We argue in this essay that additional requirements, such as technological neutrality and interoperability, are needed to mitigate such risks. We illustrate our case through blockchain proposals for RegTech and SupTech and their interoperability challenge.

Suggested Citation

Batista, Pedro M. and Ringe, Wolf-Georg, Dynamism in Financial Market Regulation: Harnessing Regulatory and Supervisory Technologies (August 31, 2020). ILE Working Paper No. 39, Accepted for publication in the Stanford Journal of Blockchain Law & Policy, Available at SSRN: https://ssrn.com/abstract=3711618 or http://dx.doi.org/10.2139/ssrn.3711618

Pedro M. Batista (Contact Author)

Institute of Law & Economics, University of Hamburg ( email )

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Wolf-Georg Ringe

University of Hamburg - Institute of Law & Economics ( email )

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HOME PAGE: http://ecgi.global/users/wolf-georg-ringe

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