The Changing Nature of ‘Regulation by Information’

Regulation by Information is a concept that has long shaped regulatory practices. Significant transformations in today’s technological landscape are radically changing regulation by information. Integrating regulatory technologies, commonly known as RegTech, revolutionises how data flows are incorporated into regulatory processes. Our article, forthcoming in the European Law Journal, explores the impact of RegTech on Regulation by Information, focusing on financial regulation as a prime example. The evolution of Regulation by Information can be understood through four distinct dimensions. Initially, it involved gathering information to support decision-making, which was extended in the second phase to guiding private actors through decision-making practices. With time, imposing information and publication standards became crucial for regulatory decision-making. Today, the advent of RegTech has ushered in the fourth dimension, characterised by integrating regulatory software into market data flows. In the context of financial regulation, the need for near real-time information flows between market participants and regulatory bodies has intensified. Consequently, regulatory software has become instrumental in shaping reporting standards and formats, thus influencing information flows and regulatory choices. This development is not confined to financial markets alone; it is expected to impact other data- and information-intensive areas. We argue that RegTech marks a fundamental change as to how Regulation by Information may take place.