New Research on Quantifying Regulation, Insider Trading Reform, and Regulatory Accumulation

Quantifying Regulation in US States

James Broughel, Patrick McLaughlin, Michael Kotrous | Data Visualization

To gain a better understanding of the reach of state-level regulation in the United States, the Mercatus Center at George Mason University launched the State RegData project and has gathered and analyzed the regulations of 46 states plus the District of Columbia. (Unfortunately, the regulatory codes of Arkansas, Hawaii, New Jersey, and Vermont were not able to be analyzed owing to data limitations.) Mercatus researchers then used text analysis and machine learning algorithms to quantify how many words and regulatory restrictions each state’s regulations contain as well as to estimate which sectors and industries of the economy those regulations are likely to affect. As in all RegData datasets, regulatory restrictions are a metric designed to act as a proxy for the number of prohibitions and obligations contained in regulatory text, as indicated by the number of occurrences of the words and phrases “shall,” “must,” “may not,” “required,” and “prohibited” in each state’s regulations. The map included shows the number of regulatory restrictions by state. The text of regulations for these states was collected between June 2015 and August 2019.

Some Challenges for Congress’s Proposed Reform of Insider Trading Plans

John P. Anderson | Policy Brief

In this policy brief, John P. Anderson discusses the background of the 10b5-1(c) rule as well as the broader scheme of things regarding insider trading reform. He discusses the origin of 10b5-1(c) and the strategic use of trading plans, as well as the current state of Congress’s proposed reforms. He then expands on some challenges for these reforms, such as restricting adoption to trading windows, imposing mandatory delays, limiting adoption of overlapping plans, limitations on termination, and mandatory disclosure and compliance. He concludes by addressing solutions to these reforms and exploring the underlying reasons insider trading as well as its consequences. 

Regulatory Review Commission + Regulatory Budget = A Diet for Better, More Effective Regulations

Patrick McLaughlin, Tyler Richards | Policy Brief

In a new policy brief, Patrick McLaughlin and Tyler Richards assess the various causes and stacking effects of regulatory accumulation and counter by these offering a description of two approaches to regulatory reform. They suggest Congress can use the Regulatory Review Commission and regulatory budgeting to assume more control over the regulatory process in the hopes that they will then improve both legislation and regulation.