One recent example of a positive implication of the private sector was the response to regulatory concerns regarding the transparency issue on hedge funds. It seems that voluntary industry codes can facilitate market-based solutions and thereby relieve pressure on supervisory resources. Such an approach will be probably more appropriate to solve problems, particularly in the context of increasing market innovation. 3.
Another way looking at the principles versus rules-based approach is the ultimate goal of the standards. Indeed, the means needed might vary from a strongly rules-based towards a soft-law approach. While if your ultimate goal is consumer or investor protection or market abuse, rules may be the right response.