FREE:Regulatorse plaintheperfectcommentletter

Author:TomYoung|Published:25Jan2012
AsEuropean,USandAsianbodiesrampuptheirregulatoryinitiatives,thepressureonstakeholdersabilitytowritesuccessfulcommentlettersisincreasing. Withoftensmallwindowstosubmitcommentsbutswathesofthefinancialsectorrelyingonwellarguedpoints,thoseresponsiblefordraftingthelettersneedtoknowhowbestto doso. Butthereislittleinformationavailableonwhatregulatorsvaluemostincommentletters.Andmanyintheindustryareuncertain. Ihaveneverhadanyonetellmethattheydidntunderstandmyresponse,soitshardformetochangemystyle, saidRuariEwing,directorattheInternationalCapitalMarket Association(ICMA). EwingwritescommentlettersextensivelyonprimarymarketsandregulatorypolicyonbehalfofICMAsmembers. ItmightbethattheyhaventreadmyresponsethoughIdoubt it.Oritcouldbefine,orgoodenough.Idontknow, hesays. AndEwingisnotalone:banks,lawfirms,accountancyfirmsandindustrybodiesareallseeminglywritingintoanabyss. SohavingheardthedraftersconcernsweapproachedkeyEuropeanregulatorstofindoutwhattheyreallywantedfromsubmissions.Theresponsesshouldgiveindustrybodies andfinancialinstitutionsaclearerideaofwhatregulatorsreallyvalue. Sohereitistheguidetotheperfectcommentletter. 1.Startwithaclearexecutivesummary Thishelpsusunderstandwhatthemainissuesare, saidonemajorregulator.Supportpositionswithevidencewherepossible. Weoftenreceivesubmissionsrelatingtounintendedconsequencesofproposals.Itwouldbehelpfultoknowsomethingofthescaleoftheseconsequences,andwhetherthey affectotherstakeholders. 2.Answertheactualquestions Clearandbriefanswerstothespecificquestionsweposearebest, saidanEsmaspokesperson. Theyremuchmoreusefulthanstatements. 3.Don tgetphilosophical Especiallywhengranularityisrequired. Policystatementsareingeneralnotveryhelpful,evenlesssoiftheyrefertoLevel1legislationinaresponsetoaLevel2initiative, said Esma. Accordingtoanothermajorregulator, ifdetailedquestionsareasked,itusuallyimpliesthatthepolicymakingprocessisrelativelyadvancedandthatwereinthephaseoffine tuningcertainoptions. Insuchcircumstances,presentresponsesinasmuchgranulardetail(supportedbyevidence),theysay. 4.Includeevidenceevenifit sanecdotal. Regulatorybodies,eventhelargestEuropeanones,arepoorrelativetofinancialinstitutions.Theyneeddata.Bankscanprovideit.Inaregulatorsownwords: Oftenwejustneedanydata,sowehavetoworkwithestimates,andrulesofthumb.Butthatwouldbeavoidedifwecouldobtainmoreaccuratedatafromindustryorother regulators. Althoughmostconsultationsdonotspecificallycallfordata,regulatorsIFLRcontactedsaidthatfindingobjectiveandreliabledataisahugechallengeandmakesprocessof estimatingtherealcostsoflegislativeinitiativesmoredifficult. Respondentsmayhavesomeestimatesinmind,andanecdotalevidenceisalsowelcome, saidone. Anecdotalevidenceordatashouldbepresentedinanobjectiveway.Wherepossible,thedataprovidedshouldbeputintoawidercontexttoallowfortheappreciationofthe relativeimportanceofaparticularassertion. Itsveryimportantthatdataprovidedisverifiable,meaningthataclearreferencetothesourceisalwaysuseful, addedone. Thiswasarecurringthemeamongstrespondents.Referencetodataandfiguresontheestimatedimpactofproposalswerewelcomedthroughout,regardlessofwhetherthey wereindicativeorqualitative. 5.Stayontopic Newitemsandissuesshouldonlybeaddediftheyredirectlylinkedtothesubjectunderconsultation. Putmoretheoreticalbackgroundmaterialinanannex.Supportingdatashouldgenerallybeputinthemaintexttogetherwitheachquestion.Morelengthysubmissionsofdata couldbeputinanannexaswell. 6.Includeopposingstakeholders'views. Itsdisproportionatelyexpensiveforsmallerfinancialinstitutionsandretailinvestorstoanswertheseconsultations.Sotheyrarelysubmitcommentletters. Becauseofthisunderrepresentation,regulatorsvaluetheircontributionmorethantheydolargerinstitutions. Weneedthemsomuch,wetaketheirresponsesintoaccounteven more, saidaregulator. Sotopreventtheraresubmissionofstakeholdersviewsbeinggivendisproportionateweight,respondentsshouldmakesuggestionswiththeneedsorinterestsofother stakeholdersinmind. Weknowitsnottheusualpractice,anditsunlikelythatwewillseemuchofthis,butwereceiveindependentviewswhichoftencompletelyopposeoneanother.Whatwewould likeinsteadisviewsonpotentialcompromiseswhichstakeholderswouldbewillingtotake, saidamajorregulator. Wewantindustryandconsumergroupstotakeintoaccountoneanothersviews.Itsalwaysmorevaluableforanswerstotakeintoaccountotherpositions. Thematerialonthissiteisforfinancialinstitutions,professionalinvestorsandtheirprofessionaladvisers.Itisforinformationonly.Pleasereadourtermsandconditionsand privac polic beforeusingthesite.Allmaterialsubjecttostrictlyenforcedcopyrightlaws.2011EuromoneyInstitutionalInvestorPLC.ForhelppleaseseeourFAQ.