To protect against such abuses, private-sector groups have proposed practices and principles for handling material nonpublic information – for example, by creating barriers between the staff members with access to such information and others. Risk-focused regulators and supervisors in turn should encourage effective implementation of these best practices, particularly in situations in which the potential for misuse, either intentional or unintentional, is high.
Conclusion Financial innovation has great benefits for our economy. The goal of regulation should be to preserve those benefits while achieving important public policy objectives, including financial stability, investor protection, and market integrity.