High Regulatory Standards Research Articles

What Do the Regulators Mean? A Taxonomy of Regulatory Principles for the Use of AI in Financial Services

The intended automation in the financial industry creates a proper area for artificial intelligence usage. However, complex and high regulatory standards and rapid technological developments pose significant challenges in developing and deploying AI-based services in the finance industry. The regulatory principles defined by financial authorities in Europe need to be structured in a fine-granular way to promote understanding and ensure customer safety and the quality of AI-based services in the financial industry. This will lead to a better understanding of regulators’ priorities and guide how AI-based services are built. This paper provides a classification pattern with a taxonomy that clarifies the existing European regulatory principles for researchers, regulatory authorities, and financial services companies. Our study can pave the way for developing compliant AI-based services by bringing out the thematic focus of regulatory principles.

Developing formal pit-latrine emptying businesses for hard-to-serve customers: resources, methods, and pricing structures

Abstract Rapidly increasing populations in informal settlements commonly use pit-latrines that require regular emptying. This study compares two emptying businesses from Kampala, Uganda and Kigali, Rwanda and identifies developments in formal services for hard-to-serve customers that are not accessible to large vehicles. Using observational and operational data shared by both businesses, we analyse the resources, methods, and tariffs used. Results indicate that although portable vacuum pumps are able to empty some facilities, fully manual methods are still required to empty thick sludge, deep pits, and weak structures in hard-to-serve areas. Manual emptying in Kampala which uses no mechanical equipment has the same overall duration as emptying using a portable vacuum pump in Kigali due to the additional time required to prepare, pack, and clean equipment. Effective municipal solid-waste management makes pit emptying faster at a lower cost. Some hard-to-serve customers require manual methods but increased costs are not affordable or equitable. This study highlights the opportunity for government and city authorities to support sanitation businesses by managing the tension between affordability, formalising services, and increasing uptake by recognising that manual emptying is required for some customers, and such higher regulatory standards can increase prices and prevent some customers from accessing formal services.

Structural and Functional Analysis of CEX Fractions Collected from a Novel Avastin® Biosimilar Candidate and Its Innovator: A Comparative Study.

Avastin® is a humanized recombinant monoclonal antibody used to treat cancer by targeting VEGF-A to inhibit angiogenesis. SIMAB054, an Avastin® biosimilar candidate developed in this study, showed a different charge variant profile than its innovator. Thus, it is fractionated into acidic, main, and basic isoforms and collected physically by Cation Exchange Chromatography (CEX) for a comprehensive structural and functional analysis. The innovator product, fractionated into the same species and collected by the same method, is used as a reference for comparative analysis. Ultra-Performance Liquid Chromatography (UPLC) ESI-QToF was used to analyze the modifications leading to charge heterogeneities at intact protein and peptide levels. The C-terminal lysine clipping and glycosylation profiles of the samples were monitored by intact mAb analysis. The post-translational modifications, including oxidation, deamidation, and N-terminal pyroglutamic acid formation, were determined by peptide mapping analysis in the selected signal peptides. The relative binding affinities of the fractionated charge isoforms against the antigen, VEGF-A, and the neonatal receptor, FcRn, were revealed by Surface Plasmon Resonance (SPR) studies. The results show that all CEX fractions from the innovator product and the SIMAB054 shared the same structural variants, albeit in different ratios. Common glycoforms and post-translational modifications were the same, but at different percentages for some samples. The dissimilarities were mostly originating from the presence of extra C-term Lysin residues, which are prone to enzymatic degradation in the body, and thus they were previously assessed as clinically irrelevant. Another critical finding was the presence of different glyco proteoforms in different charge species, such as increased galactosylation in the acidic and afucosylation in the basic species. SPR characterization of the isolated charge variants further confirmed that basic species found in the CEX analyses of the biosimilar candidate were also present in the innovator product, although at lower amounts. The charge variants’ in vitro antigen- and neonatal receptor-binding activities varied amongst the samples, which could be further investigated in vivo with a larger sample set to reveal the impact on the pharmacokinetics of drug candidates. Minor structural differences may explain antigen-binding differences in the isolated charge variants, which is a key parameter in a comparability exercise. Consequently, such a biosimilar candidate may not comply with high regulatory standards unless the binding differences observed are justified and demonstrated not to have any clinical impact.

Simulation strategies for the Food and Drug Administration nozzle using Nek5000

Computational fluid dynamics (CFD) is currently a versatile tool used for flow characterization in diverse areas of industry and research; however, its application in medical devices is less developed due to high regulatory standards for safety purposes. In this context, the development of a rigorous and standardized CFD methodology is essential in order to improve the accuracy and ensure the reliability of biomedical applications. To that end, the Food and Drug Administration (FDA) proposed a benchmark model of an idealized medical device to provide a common ground for verification and validation processes. Previous studies have evaluated the potential of conventional turbulence models to predict the relevant flow features in the FDA nozzle but have also been deemed inaccurate or exhibited high dependency on the numerical scheme. Furthermore, validation of computational results relied on previous experiments performed with particle image velocimetry (PIV), which also exhibited noticeable uncertainties. Here, we perform direct numerical simulations (DNSs) of the flow through the FDA nozzle configuration, at Reynolds numbers based on the throat diameter Ret = 500, 2000, 3500, and 5000, using the spectral-element code Nek5000. The predictive capabilities of the synthetic-eddy method and parabolic-inflow conditions at the inlet were tested, and the results were compared with PIV data. Our results highlight the very high sensitivity of this flow case to the inflow conditions and the disturbances at the throat, particularly when predicting the laminar–turbulent jet breakdown. Due to this extreme sensitivity, any benchmark data of this geometry need to include a very detailed characterization of both the conditions at the inflow and the throat, in order to enable relevant comparisons.

The Shanghai Effect: Do Exports to China Affect Labor Practices in Africa?

Summary To investigate whether Africa’s exports to China influence labor practices in Africa, we reconsider the debate over trade’s influence on regulatory standards in exporting countries. The first generation of trade–regulation scholars asked whether high levels of exports influenced regulatory standards of exporting countries, with inconclusive results. The second generation of scholarship focused not on how much a country exported but to whom it exported, identifying a “California Effect” by which firms and consumers in (mostly developed) importing countries projected their high regulatory standards on less developed export partners. Structural change—especially the rise of China as a major importer—poses a challenge to these optimistic findings. Drawing on insights from the analysis of compositional data, this paper introduces a third generation of trade–regulation research, which suggests examining not only with whom a country trades, but also how the composition of markets in a country’s export basket reshuffles over time. Specifically, we explore the possibility of a “Shanghai Effect” whereby African countries begin to reflect the lower labor standards of China, which has emerged as a major destination for their exports. We show that when a country increases exports to China, the net effect on domestic labor standards depends critically on the labor practices of other export destinations compositionally displaced by China exports. Our analysis of a panel of 49 African countries for the period 1985–2010 produces a small continent-wide estimate of China’s negative influence on African labor practices. In-sample simulation at the country level uncovers a moderate Shanghai Effect for a handful of countries only.

Measuring Community Resilience: The Role of the Community Rating System (CRS)

Community resilience has become an important concern due to the increasing scale and frequency of natural and technological disasters. Although several frameworks have been introduced to measure resilience, there has been no systematic process that captures all the key sectors of a community. This paper introduces an holistic approach to measure community resilience by specifying the Human, Social, Physical, Natural, Financial and Political sectors of a community [labeled the six capitals (6Cs)] and characterizing four properties of resilience (4Rs) (robustness, resourcefulness, redundancy and rapidity). The 6C-4R framework is linked to the National Flood Insurance Program’s (NFIP) Community Rating System (CRS) that rewards communities for adopting flood risk reduction activities using illustrative examples of resilience strategies adopted by communities and examining the challenges facing the city of New Orleans today after suffering severe losses from Hurricane Katrina. We conclude the paper with a case study of Cedar Rapids, Iowa that joined the CRS in 2010 following a severe flood in 2008. The community has recently undertaken several efforts to reduce future flood losses, notably higher regulatory standards, such as requiring buildings to be higher than the base flood elevation and acquisition and relocation of property to less flood prone areas. Although the CRS captures several sectors of a community, it lacks a measure of social vulnerabilities, which is an important element for community resilience. Future studies are needed to show how one can integrate measures of social vulnerabilities with the CRS for a more holistic view of community resilience.

Barriers to the Implementation of Strategic Corporate Social Responsibility in Shipping

ABSTRACT Strategic corporate social responsibility (CSR) involves the voluntary practice of social and environment activities to satisfy firms’ stakeholders, with the intention of generating profits. Companies, especially those within the shipping industry, often face challenges when implementing strategic CSR. The paper therefore, seeks to identify, rank, and discuss the barriers to the implementation of strategic CSR in shipping. A list of barriers was first identified from reviewing the literature. Subsequently, a survey was administered to 600 shipping companies in Singapore and the collected data were analysed using structural equation modelling. The results showed that factors relating to lack of resources, lack of strategic vision, lack of measurement system, high regulatory standards, and low willingness to pay for CSR are significant barriers to implementing strategic CSR in shipping. The findings imply that the practice of strategic CSR is contingent on both the firm's macro-environment and micro-environment, albeit to a lesser extent. Understanding these potential barriers can help companies avoid or overcome these barriers and improve their chances of successfully implementing strategic CSR.

A tiered area‐of‐review framework for geologic carbon sequestration

AbstractThis paper discusses the current guidance given by the United States Environmental Protection Agency (EPA) on delineating the so‐called Area of Review (AoR) for the permitting of geologic carbon sequestration (GCS) projects. According to the EPA's regulatory framework for GCS, the AoR refers to the region surrounding the CO2 injection well(s) wherein leakage of CO2 and/or the migration of formation fluids could possibly endanger overlying groundwater resources. Our evaluation of the current framework for delineating the size of this area finds unnecessary conservatism in the definition of the critical pressure, which could lead to a heavy burden on permit applicants that seek to get regulatory compliance, in particular for very large GCS projects. We propose a risk‐based re‐interpretation of this framework, separating the total Area of Review into different sub‐areas with different regulatory requirements depending on whether the concern is about free‐phase CO2 or pressure‐driven brine migration. This leads to a tiered AoR definition in which the projected region of CO2 plume extent would have the highest regulatory standards regarding site characterization, monitoring, and corrective action. The requirements in the AoR outside this central region would be less burdensome because of a narrower focus on major pathways for brine leakage such as unplugged wellbores and large faults. We expect that this revised framework would allow for a reduction in the cost of regulatory compliance for projects with very large injection volumes, while ensuring that the objective of protecting valuable groundwater resources is preserved.

Regulatory Issues Concerning the Development and Circulation of Nicotine-Containing Products: A Qualitative Study

This paper explores perceptions of how the regulation of nicotine-containing products (NCPs) impacts the development and availability of more effective cigarette substitutes. Qualitative study using semistructured interviews with 20 key stakeholders (7 academic experts in tobacco control, 5 representatives of 3 pharmaceutical companies, and 8 representatives of organizations involved in tobacco-control policy making) and documentary analysis. Four main themes were identified. In general, currently available nicotine replacement therapies (NRTs) were considered to be relatively unsuccessful as substitutes because they deliver insufficient nicotine too slowly. Stronger, faster-acting nicotine products were deemed necessary. However, issues were raised about how smokers may perceive stronger, faster-acting products linked to misunderstandings about nicotine. Pharmaceutical companies have shown reluctance to pursue NRT development; discussions around harm reduction are shifting company attitudes, although concerns remain about the impact of developing more addictive products on company image and whether such products would be problematic to license. The greater cost of producing an NCP within the medical regulatory regime, compared with cigarettes, was underlined. Recreational NCPs were considered problematic as they do not currently need to meet the high regulatory standards required for medications. Although experts generally agreed that NRT development ought to focus on stronger and faster-acting products, questions were raised over whether this aligns with smokers' understandings and requirements. A more nuanced grasp of how smokers understand harm-reduction approaches and products is required. Pharmaceutical companies may not be best placed to innovate, indicating that the market may well be left to other actors including the tobacco industry.

Changing Policy, Changing Culture: Steps Toward Early Learning Quality Improvement in Australia

Across Australia a combined government effort is underway to reform early childhood education and care (ECEC) provision. A National Law Bill passed in 2010 heralds a new legal, regulatory and accountability framework that embraces all types ECEC provision. As a result, service providers face rapid change to address a new orientation and higher regulatory standards. This paper reviews the Australian system change in light of the tools selected under a human capital development conceptualisation, international debate about ECEC provision and what is at stake in the reform of ECEC systems. Questions are raised about the capacity of national reform enterprise within complex systems to change local practice. The tools selected to address quality in an ECEC system affect both the implementation of ECEC programs and the outcomes. Local leadership and community engagement in ECEC provision is paramount if improvements in the quality of provision are to be assured.

Editorial

Suggestions that offshore jurisdictions are somehow responsible for our current economic woes are largely misplaced. They overlook the high regulatory standards operated in many offshore jurisdictions and the fact that failed institutions—such as RBC and Lehman—were the subjects of onshore regulatory oversight. Two possible conclusions are that such criticisms have more to do with finding convenient scapegoats and trying to protect the tax base of onshore jurisdictions. The latter raises the philosophical question; what is so bad about tax competition? It is part of the rationale for the long established rule—articulated by Lord Mansfield in Holman v Johnson (1775)—that no country takes notice of the revenue laws of another. Competition is justified when the UK sets out to attract international capital with their benign approach to the taxation of non-domiciliaries. Initiatives such as those pursued by the OECD create a sense of injustice and of double standards. Such attention is particularly unwelcome at the present time, when offshore jurisdictions are struggling to come to terms with the effects of the economic hurricane.

Forcing technological change: A case of automobile emissions control technology development in the US

This article investigates how regulated automakers and upstream component suppliers comply with “technology-forcing” regulations, or laws that set performance standards beyond their usual technological capabilities. In particular, this article examines how firms manage and organize their research and development (R&D) processes concerning automobile emissions control technologies amid the uncertainties resulting from the issuance of new regulations. This study involves the analyses of patents, interviews with experts, references to technical papers published for conferences of the Society of Automotive Engineers (SAE), and use of learning curves. The results of this study show that the high regulatory standards under the technology-forcing regulation played an important role in forcing technological innovations and determining subsequent direction of technological change. Component suppliers were important sources of innovation in the 1970s, but over the course of technological evolution, automakers gradually emerged as the locus of innovation. This study also shows that firms strategically manage architectural and component knowledge in the presence of uncertainties about their technological capacity to meet new auto emissions control standards.

Competition and Convergence in Corporate Regulation: The Case of Overseas Listed Companies

Overseas listings are important part of the debate on competition and convergence in corporate regulation because they allow companies to opt into a system of regulation which differs from their country of incorporation. This paper examines why and how countries and exchanges compete for overseas listings and how convergence in listing rules can occur in these circumstances. Particular attention is paid to the explanation for overseas listings which holds that companies will list in countries with high regulatory standards so as to enhance the credibility of information disclosure to investors and thereby increase their share price. It is shown in this paper that the simple model of bonding which has generally been adopted in previous research does not reflect the complex manner in which an overseas listing links a company with the system of corporate regulation in an overseas listing jurisdiction. The bonding is, in reality, weaker than has previously been assumed. Nevertheless, the bonding thesis appears to be broadly supported by recent research on trends in overseas listings, which suggest that competition for overseas listings, far from leading to a regulatory race to the bottom is resulting in listed companies being drawn towards countries and exchanges which adopt high standards of regulation.