What is the difference between regulatory engagement and lobbying?

Lobbying is direct advocacy to officials for a position, usually on legislation. Regulatory engagement is broader and more technical. It supplies agencies with evidence, analysis and workable alternatives through formal consultations and permitted meetings, across the whole life of a rule. Many jurisdictions apply transparency or registration rules to both, and engagement works best when the company is seen as a reliable source of facts, not only an advocate.

How long is a public comment period?

It depends on the system. US law requires federal agencies to give notice and a chance to comment, and each agency sets the length in its notice. The European Commission usually runs a call for evidence for four weeks and a public consultation for twelve weeks. Those windows are short compared with the time it takes to build credible evidence, so preparation has to start before they open.

Should a company engage a regulator if it opposes the rule?

Yes. Opposition without engagement leaves the regulator to write the rule without your evidence. A company can disagree with the objective and still help shape the thresholds, timelines and methods that decide what the rule costs. Regulators remember who brought useful facts, and that standing carries into the next rulemaking. Silence is usually read as having nothing to add.

Who inside a company should own regulatory engagement?

One named owner, usually in government relations or public affairs, with a direct line to the business and legal teams. Legal makes sure the submission is sound, operations supplies the data, and communications keeps public statements consistent with what the company tells the regulator. Without a single owner, issues are spotted late and the company speaks with several voices.

Perspectives

Regulatory Engagement Strategy

Why the case for a rule is made before the rule is written.

By Nathan Sproul, Founder & Managing Director

A regulatory engagement strategy is a plan for entering rulemaking early enough to shape the rule, not just respond to it. The work starts before any draft exists: knowing which agency is moving, what evidence it lacks, and when the formal windows for input will open. Companies that arrive with evidence and a workable alternative still have influence; companies that arrive with objections alone rarely do.

What is a regulatory engagement strategy?

It is the deliberate plan a company uses to take part in making the rules that govern its business. It sets out which bodies matter, when they will act, what the company can credibly contribute, and who else shares its position. Many companies treat regulation as something that happens to them, handled by the legal team once a text is published. That is compliance, not engagement. Engagement treats the regulator as a counterpart with a problem to solve, and the company as a source of the facts needed to solve it well. Lincoln Strategy Group builds these plans for organizations across 19 industries, and the pattern holds in each: the earlier a company enters, the more of the rule is still open.

How early should a company engage a regulator?

Earlier than feels necessary, and ideally before a proposal is drafted. By the time a regulator publishes a proposed text, its staff have usually settled the problem they want to fix, the options they considered and the evidence they trust. Comments at that stage can change details. They rarely change direction. The useful window is the period when the agency is still defining the problem, which shows up in work programs, speeches, studies, hearings and requests for information. A company that brings useful data then helps frame the question. A company that waits for the draft negotiates inside someone else's frame. A practical test: if a regulator has said it is looking at an issue that touches your business, the engagement has already started, whether or not you have joined it.

Where are the formal windows for input?

Every system has them, and a good strategy maps them in advance. In the United States, the Administrative Procedure Act requires federal agencies to publish proposed rules in the Federal Register and give interested parties the chance to submit written data, views or arguments, which the agency must consider before it adopts a final rule. In the European Union, the European Commission opens a call for evidence, usually for four weeks, when it starts work on an initiative. A public consultation follows, typically twelve weeks for major legislation, and later the Commission takes feedback on draft acts and shares it with the European Parliament and the Council. Member states, national regulators and standards bodies run processes of their own. Since 2012 the OECD has asked its member governments to give the public meaningful opportunities to contribute to draft regulation, and governments across the Americas, the Middle East, Africa and Asia run their own versions, on their own timetables. The forms differ. The principle does not: the window is announced, and then it closes.

What does a regulator actually want from a company?

Evidence it cannot easily get elsewhere. Regulators work with limited staff and imperfect information about how a market operates. They need cost data, operational detail, technical feasibility, and a clear picture of what a rule would do in practice. A submission that supplies those things, quantified and verifiable, gets read. A submission that restates a position, or predicts disaster without numbers, gets filed. The strongest input also offers a workable alternative: a different threshold, a phased timeline, or a reporting method that meets the regulator's objective at lower cost. Regulators have to defend their rules in public and sometimes in court. Give them a better rule to defend.

A six-step sequence for engaging regulators

Most cases follow the same order. First, map the field: the agencies with authority, the officials who draft, the political leadership above them, and the other bodies, at home and abroad, whose rules interact with theirs. Second, monitor the signals, so that you see an initiative forming months before a text appears. Third, build the evidence: the data, case studies and impact analysis the regulator will need, prepared to survive hostile review. Fourth, find allies, such as trade associations, customers, suppliers, researchers and sometimes unlikely partners, whose agreement makes the case harder to dismiss. Fifth, engage through every legitimate channel: meetings where the rules allow them, formal submissions on time and in the required form, and hearings or workshops where they exist. Sixth, follow through. Track how the text changes, respond to the next draft, and prepare for implementation, where many of the real terms are settled.

Why do companies engage too late?

Usually because no one owns the issue until it becomes urgent. Regulation sits between legal, government relations, operations and communications, and each assumes another is watching. The warning signs are familiar. The first internal meeting happens after the proposal is published. The submission is drafted by lawyers in the last week of the comment period. The company has no data the regulator does not already hold. Its only allies are its direct competitors. Each of these is fixable, but only before the window closes. The remedy is a named owner, a standing watch on the agencies that matter, and a habit of talking to regulators when nothing is being asked of them.

Does the approach change from country to country?

The method holds; the map changes. In some capitals the decisive work happens in formal consultation. In others it happens inside ministries before anything is published, or in the implementing agency after a law has passed. Norms for meeting officials, transparency and registration rules, and the weight given to industry evidence all differ. A strategy built for Washington will misread Brussels, and one built for Brussels will misread a ministry in the Gulf or Southeast Asia. Every problem is its own problem. Across 73 countries, the constant is the discipline: arrive early, bring evidence, and stay through implementation.

Common questions

What is the difference between regulatory engagement and lobbying?: Lobbying is direct advocacy to officials for a position, usually on legislation. Regulatory engagement is broader and more technical. It supplies agencies with evidence, analysis and workable alternatives through formal consultations and permitted meetings, across the whole life of a rule. Many jurisdictions apply transparency or registration rules to both, and engagement works best when the company is seen as a reliable source of facts, not only an advocate.
How long is a public comment period?: It depends on the system. US law requires federal agencies to give notice and a chance to comment, and each agency sets the length in its notice. The European Commission usually runs a call for evidence for four weeks and a public consultation for twelve weeks. Those windows are short compared with the time it takes to build credible evidence, so preparation has to start before they open.
Should a company engage a regulator if it opposes the rule?: Yes. Opposition without engagement leaves the regulator to write the rule without your evidence. A company can disagree with the objective and still help shape the thresholds, timelines and methods that decide what the rule costs. Regulators remember who brought useful facts, and that standing carries into the next rulemaking. Silence is usually read as having nothing to add.
Who inside a company should own regulatory engagement?: One named owner, usually in government relations or public affairs, with a direct line to the business and legal teams. Legal makes sure the submission is sound, operations supplies the data, and communications keeps public statements consistent with what the company tells the regulator. Without a single owner, issues are spotted late and the company speaks with several voices.

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