The Australian Law Reform Commission (ALRC) is considering whether a more principles-based approach should be applied to financial services regulation in a bid to remove confusing complexity.

ALRC President Sarah Derrington invited feedback from international experts last week on how other jurisdictions have used rules and guidelines to manage the “competing imperatives” of certainty and flexibility.

“That is where we have to land, that balance between principles at a higher level and enough certainty for people to conduct their business efficiently,” she told a webinar held as part of a three-year review to simplify the Corporations Act and its surrounding framework.

Justice Derrington says Australia’s framework features primary legislation, delegated legislation made by a minister or the Australian Securities and Investments Commission and soft laws such as regulatory guidance.

“We in this country have several layers of legislation, sometimes, often, inconsistent with one another,” she said. “It is often very difficult to find all of these layers, so it has consequences for the navigability and coherence of the law.”

UK Financial Conduct Authority Enforcement and Market Oversight Executive Director Mark Steward said 11 principles guiding that country’s regulation have provided a high-level guide to outcomes the regulator is aiming to achieve.

But he noted its important broad definitions are not undercut by “lots of other provisions, waivers, exemptions and exclusions”.

Linklaters (London) Partner Martyn Hopper told the seminar it was time to end the debate around principles versus prescriptive legislation.

“That is a debate which I think is stale, tired and has exhausted its usefulness,” he said. “The reality is you need both.”

A recording to the webinar is available here.