The United States has maintained a “rules-based” approach to securities regulation while the UK has been progressing to a “principles-based” system of securities regulation.

a. Consider the rules-based and principles-based regulatory approaches to traffic speed limits. How might speed limit regulations be phrased in either case?

b. Why might rules-based speed limit regulations be more difficult to implement?

c. Why might principles-based speed limit regulations be more difficult to enforce?