RegTech和预见性立法：缩短预期监管活动与监管之间的RegLag（英文版）.pdf

RegTech and Predictive Lawmaking: Closing the RegLag between Prospective Regulated Activity and Regulation John W. Bagby 1 passing new legislation or granting permission on a case by case basis; and even adopting a more interactive approach between private sector players and regulators, like the implementation of innovation offices, accelerators and even sandboxes. 4 But, world-wide, regulators are often hamstrung in defining regulable activity by one or more of the following: (i) strict constructionism; 5 (ii) opacity; 6 (iii) narrowly defined wrongs too often 3 For a discussion of addressing third party costs, see e.g., Varian, Hal, A Solution to the Problem of Externalities When Agents Are Well Informed, 84 AM.ECON.REV. 1278 - 1293 (1994) accessible at: jstor/stable/2117772?seq=1 (subscription required). 4 Aurelio Gurrea-Martnez 8 and/or (v) limited investigatory and enforcement budgets or agency expertise. 9 This situation is precisely the limit sought by many libertarians; liberty seems to be enhanced by effectively limiting government power to address societal needs without first expending great cost from limited resources. It almost guarantees that regulatory responses will lag nearly any initial perception of perceived wrongs. Activities susceptible to eventual, broad perception of wrongfulness are arguably regulable. This Article focuses on a Regulatory Lag (RegLag) theory, which is somewhat similar to the “Law Lag” concept mentioned in recent law and technology literature in connection with attempts to regulate new technology-driven products and services but more inclusive. 10 7 This was the case, for example, with the Dodd Franks Volcker Rule. See e.g. Arthur E. Wilmarth, Jr., Narrow Banking: An Overdue Reform That Could Solve the Too-Big-to-Fail Problem and Align Us and Uk Financial Regulation of Financial Conglomerates (Part 1), BANKING In re B Carla L. Reyes, Moving Beyond Bitcoin to an Endogenous Theory of Decentralized Ledger Technology Regulation: An Initial Proposal, 61 VILL. L. REV. 191, 202 (2016) (explaining law lag in the context ob distributed ledger technology and its regulation); Thomas R. McLean, M.D., J.D., FACS, Esq., The Offshoring of American Medicine: Scope, Economic Issues and Legal Liabilities, 14 ANNALS HEALTH L. 205, 254 (2005) (discussing things that tend to limit the legal lag time associated with telemedicine technology and usages); Michael L. Rustad Sanderson v. Intl Flavors this makes legal and policy changes easier and faster) 12 Suspecting that President Trump is attempting to limit in many ways the actions that agencies can take in investigations and enforcement proceedings, on January 30, 2020, the OMB published a Notice entitled “on Promoting the Rule of Law Through Transparency and Fairness in Civil Administrative Enforcement and Adjudication.” In the Notice the OMB solicited comments on the issues fairness of the adjudication procedures that agencies use in enforcement proceedings. See Richard J. Pierce, Comments of Richard J. Pierce, Jr. on Promoting the Rule of Law Through Transparency and Fairness in Civil Administrative Enforcement and Adjudication, Docket Number OMB-2019-0006 (February 11, 2020), at SSRN: 13 See generally, David Eliot Bernstein, “Administrative Constitutionalism:” Considering the Role of Agency Decisionmaking in American Constitutional Development, (forthcoming Social Philosophy and Policy 2020), at SSRN: Electronic copy available at: RegTech Lag Bagby Alejandro E. Camacho, Adapting Governance to Climate Change Managing Uncertainty Through a Learning Infrastructure, 59 EMORY L.J. 1, 16-24 (2009); Robert L. Glicksman, Ecosystem Resilience to Disruptions Linked to Global Climate Change An Adaptive Approach to Federal Land Management, 87 NEB. L. REV. 833, 865-91 (2009); Robin Kundis Craig spending will reach $115.9 billion, PAYMENTSNEXT accessible at: disruption-growing-spending-will-reach-115-9-billion/; Suresh, Arun, RegTech: A new disruption in the financial services space, PWC INDIA accessible at: pwc.in/consulting/financial-services/fintech/fintech-insights/regtech-a-new- disruption-in-the-financial-services-space.html Electronic copy available at: RegTech Lag Bagby University of Missouri School of Law Legal Studies Research Paper No. 2020-16. Available at SSRN: 25 For example, the Uniform Domain Name Dispute Resolution Policy (UDRP), launched in late 1999, arguably settles trademark and other aspects of disputed domain name registrations more efficiently than IP trials at law. Given the Internet is an inherently international medium, judicial resolution of domain name disputes would often be cost prohibitive. The UDRP was initiated by the World Intellectual Property Organization (WIPO) deploying online dispute resolution using electronic and expert human facilities of ICANN (Internet Corporation for Assigned Names and Numbers). As a non-judicial, online ADR method, the UDRP represents a RegTech mechanism, successfully settling nearly 48,000 cases involving both national and international disputes. The UDRP exemplifies successful SRO-management. See generally, Bagby, John W. Luca Enriques, Financial Supervisors and RegTech: Four Roles and Four Challenges, REVUE TRIMESTRIELLE DE DROIT FINANCIER 53 (2017). 42 See e.g., Regulatory Technology (RegTech)-Brief, ERNSTYOUNG (Mar.14, 2019) accessible at: services/ey-regulatory-technology-regtech.pdf 43 Arner, Douglas W., Jnos Barberis statistical and analytics-informed insights to guide government agencies enforcement; 90 biometrics and the interpretation of social media; 91 and the vast proliferation of sensors throughout regulated supply chains. Regulated entities may deploy similar technologies in their compliance efforts to collect, format, confidentially submit and publicly disclose real-time or bulk information. 92 RegTech is also expected to require novel forensic techniques beyond the mandatory reporting regime underlying some early RegTech solutions. 93 These RegTech methods, usages and challenges suggest design elements for this Articles Anticipatory RegTech Model. 94 A. Bringing Technologies into the Regulatory Agency Process Federal and state efforts to bring technologies into the regulatory agency process is something that has become more noticeable. 95 One such 89 See e.g., Havakhor, Taha and Rahman, Mohammad Saifur and Zhang, Tianjian and Zhu, Chenqi, Big Data, Retail Investors, and Financial Markets (March 26, 2020). Available at SSRN: or dx.doi/10.2139/ssrn.3434812 (arguing big data availability increases trading volume). 90 See e.g., Ferguson, Andrew Guthrie, Predictive Policing Theory, Ch.24 in THE CAMBRIDGE HANDBOOK OF POLICING IN THE UNITED STATES (Tamara Rice Lave American University, WCL Research Paper No. 2020-10. Available at SSRN: 91 Packin, Regtech, Compliance and Technology Judgment Rule, supra note 38. 92 Bulk cites: Some Government Printing Office (GPO) mediated data derived from regulated entity disclosures are now accessible online as “bulk data” through the private- sector host, GitHub and at the BULK DATA REPOSITORY, accessible at: govinfo.gov/bulkdata 93 See e.g., Hank C.C and Patricia A. McCoy, Inside Job: The Assault on the Structure of the Consumer Financial Protection Bureau, 103 MINN. L. REV. 2543 (2019) (describing how after the Trump Administration took power, the new leadership declared outright war on the Consumer Financial Protection Bureau (CFPB) and tried to de-regulate much of the issues the Bureau has focused its power on). Electronic copy available at: RegTech Lag Bagby GWU Legal Studies Research Paper No. 2020-17; GWU Law School Public Law Research Paper No. 2020-17. Available at SSRN: (arguing RegTech information access initiatives at regulatory agencies suffering reversals). Electronic copy available at: RegTech Lag Bagby (B) establish administrative mechanisms allowing affected persons to seek and obtain correction of information maintained and disseminated by the agency that does not comply with the guidelines issued under subsection 113 Data Quality Act a/k/a Information Quality Act, Pub.L. 106554. 114 Pub.L.107347, 116 Stat. 2899, 44 U.S.C. 101, H.R. 2458/S. 803 accessible at: govinfo.gov/content/pkg/PLAW-107publ347/pdf/PLAW-107publ347.pdf 115 Pub.L.113-283 (Dec.18, 2014) 116 DoD cybersecurity is generally a superset of NIST standards as control over weapons systems carries higher potential costs than many other regulatory program foci. 117 See e.g., Improving Critical Infrastructure Cybersecurity, Exec.Order No.13636 (Feb.12, 2013) accessible at: obamawhitehouse.archives.gov/the-press- office/2013/02/12/executive-order-improving-critical-infrastructure-cybersecurity and Electronic copy available at: RegTech Lag Bagby Privacy Act (1974); Electronic Communications Privacy Act (1986); Drivers Privacy Protection Act (1994); Health Insurance Portability and Accountability Act (1996); and Financial Services Modernization Act (Gramm-Leach-Bliley Act) (1999). Electronic copy available at: RegTech Lag Bagby Thomas R. McLean, , The Offshoring of American Medicine: Scope, Economic Issues and Legal Liabilities, 14 ANNALS HEALTH L. 205, 254 (2005) (discussing things that tend to limit the legal lag time associated with telemedicine technology and usages); Michael L. Rustad Michael L. Rustad it does not lead it.” See e.g. Rosen v. Ciba-Geigy Corp., 78 F.3d 316, 319 (7th Cir. 1996); Sanderson v. Intl Flavors and that other agencies patented innovation is heavily weighted toward mathematics, social sciences, and data analytics). 152 John W. Bagby et. al., An Emerging Political Economy of the Blockchain: Enhancing Regulatory Opportunities, 88 UMKC L. REV. 419, 474 (2019). Electronic copy available at: RegTech Lag Bagby there are powerful constituents (both regulated entities and affected parties) under each agency, these two quasi- independent agencies are generally disincentivized towards coordination, and financial innovation occurs world-wide incentivizing evasion of 153 See e.g., Pollman, Elizabeth, Tech, Regulatory Arbitrage, and Limits (May 24, 2019). 20 EUR. BUS. ORG. L. REV. 567 (2019); European Corporate Governance Institute (ECGI) - Law Working Paper No. 455/2019; Loyola Law School, Los Angeles Legal Studies Research Paper No. 2019-16. Available at SSRN: and Riles, Annelise, Managing regulatory arbitrage: A conflict of laws approach, 47 CORNELL INTL L.J. 63 (2014). 154 Friesendorf, Cornelius, Squeezing the Balloon, United States Air Interdiction and the Restructuring of the Southern American Drug Industry in the 1990s, 44 CRIME, LAW and explore how technology can reshape compliance and speed effective interaction between regulators and financial institutions.” 204 Specifically, the CPFB “plans to design innovative electronic methods” for addressing some of its goals, which are reflected in laws such as the Equal Credit Opportunity Act (ECOA) and/or the Fair Credit Reporting Act (FCRA), improving the accuracy of information used to take adverse action, and ever more importantly, to anticipate discrimination on a prohibited basis and try to better prevent it. 205 iii. RegTech Anticipates Market Manipulation Balance is an elusive goal among various market influences. Atomized, redundant, separate, and poorly-linked markets that trade similar or complementary goods and services, may retain some independence from each other despite their similarity. One benefit of such market isolation includes their autonomy from gyrations imposed by other markets. However, they suffer risk that their isolation deprives them of useful influences from markets trading similar assets. Gyrations sound harmful while useful influences often seem important, particularly if accurate signals spell efficiency from whatever source those signals emanate. Separated, independent markets probably serve mostly the interests that dominate each. Strong inter-market linkages likely connect all markets with a larger, louder, seemingly legitimate “guiding-hand,” thereby, representing the wisdom of bigger crowds. However, as globalization continues, advancements in the speed and spread of market influences, perhaps the ultimate achievement of long overdue National Market System, 206 suggest 203 Innovation at the Bureau, CFPB, at consumerfinance.gov/policy- compliance/innovation/ 204 Id. 205 E-disclosures Tech Sprint, supra note 200. 206 Securities Act Amendments of 1975, Pub.L. No. 9429, S.249 (94 th Cong.) gpo.gov/fdsys/pkg/STATUTE-89/pdf/STATUTE-89-Pg97.pdf (empowering SEC rulemaking to establish national market system) and Regulation NMS, SEC Securities Exchange Act Rel.No. 51808 (June 6, 2005) accessible at: sec.gov/rules/final/34-51808.pdf See also., Hamilton, James L., Marketplace Organization and Marketability: NASDAQ, the Stock Exchange, and the National Market System, 33 J.FIN. 487-503 (1978); Poser, Norman S., Restructuring the Stock Markets: A Critical Look at the SECs National Market System, 56 N.Y.U.L.REV. 883 (1981); and Macey, Jonathan R., Notice of Filing of a Proposed Rule Change to Amend the Exchanges Opening Process Including on VIX Settlement Days, SEC Exchange Act Rel.No. 86387 accessible at: sec.gov/rules/sro/cboe/2019/34-86387.pdf Electronic copy available at: RegTech Lag Bagby Arner, Douglas W., Janos Barberis Piri, Michael M., The Changing Landscapes of FinTech and RegTech: Why the United States Should Create a Federal Regulatory Sandbox, 2 BUS. the need to deal with the challenges associated with where many third parties are situated, which is beyond serviceable jurisdictions; the issues associated with ISP, IaaS, and SaaS providers that impose liability waivers in their service level agreements (SLA); the administration of service level management (SLM); and metrics that can be daunting. Additionally, restrictive contractual terms, like non-disclosure agreements (NDA), lock-in provisions and non- competes make RegTech solutions complex to manage. 250 See, Huang, Keman and Madnick, Stuart E., Cyber Securing Cross-border Financial Services: Calling for a Financial Cybersecurity Action Task Force (March 1, 2020). Working Paper CISL# 2020-17. Available at SSRN: or dx.doi/10.2139/ssrn.3570140 Electronic copy available at: RegTech Lag Bagby & Packin 61 VI. Conclusion RegTech shows great promise in narrowing the RegLag gap. RegTech programs can improve regulatory agency clairvoyance, and help regulators to more aggressively adapt to changing regulable activities, such as by using anticipatory approaches. But any such transformation will remain elusive in the near to medium future for various reasons, including the technology diffusion lag. Opposition at nearly every turn should be anticipated if RegTech is to become