Been thinking a lot lately about the pace of regulatory changes, especially with new asset classes emerging. When a new rule comes down, say regarding $BTC derivatives, how quickly are firms genuinely expected to integrate it and be fully compliant? Is there a grace period for interpretation or does the expectation of 'reasonable knowledge' mean immediate adherence?
That's a great point, especially with the rapid evolution of crypto. While regulators often issue guidance and allow for comment periods, the expectation for immediate adherence to the letter of the law, once effective, is generally high. The 'grace period' often comes from a risk-based enforcement approach rather than an explicit allowance for non-compliance, but even that can vary widely depending on the nature of the rule and the potential for harm.
Immediate adherence is the de facto expectation, whether it's reasonable or not. Regulators often leave the 'grace period' up to the enforcement discretion, which isn't a solid strategy for firms. Best to over-prepare.