Regulators in the past few years have struggled to keep up with the pace of change and the difficulties posed by technological innovation.
The emergence of new business models and means of delivering services have highlighted the inadequacies of rules designed for a paper-based world. In response to this issue, the Financial Services Authority (FSA) has made a compelling case for the principle of technological neutrality – the principle that regulation should take effect on a functional basis, regardless of the means by which regulated services are provided. This principle has underpinned much of the FSA’s approach to regulation in the run up to, and since, N2.
