COMMENTIt is commonplace for multiple versions of financial regulation to be enacted. Basel I, II and III, MiFID I and II, and of course Solvency I and II are all examples of this – but what is the tipping point for the existing version to need a “sequel”? And is there a way to determine if the Solvency regime is heading towards a trilogy? Mark Piper, VP UK, Ireland and the Middle East at Wolters Kluwer Financial Services, takes a closer look. In the software industry, the development lifecycle follows the basic steps of analysis, design, quality assurance, implementation and maintenance. A similar process can also be applied to the way regulation is formed. With Solvency II, for example, EIOPA is currently in the quality assurance phase or more accurately, the quantitative impact survey (QIS) stage. While there may be rumours of post-QIS5 solvency II framework being put in place, a crucial step for the regulator has to be deciding when to commit to the next phase. However, an important point to note here is that software developers have recognised ISO standards that they can adhere to in order to judge what constitutes a ‘hot fix’ or the next version. Regulators ultimately have to make the final decision on when and how to issue the regulation themselves – albeit with intensive input from the industry. One way that a regulator may judge whether or not a change constitutes a ‘hot fix’ or ‘release’ is to consider whether it falls into one of three categories: unresolved issues, missing elements or a major shift in the external environment.