Preparing for Major Regulatory Change: The Mistakes That Cost You

The pattern of failure is remarkably consistent

Big regulatory change rarely surprises the firms that get caught out. The direction of travel is usually visible for eighteen months or more. What goes wrong is the preparation itself: the wrong people are consulted, the wrong assumptions are locked in early, and by the time the real veto players speak, the position is too public to move.

Here is what actually goes wrong, and how to tell whether your own stakeholder work has covered the ground it needs to.

The mistakes that recur

Treating the consultation paper as the brief

The published text is the visible tip. The decisions that matter, on scope, transition, supervisory expectations, are shaped in conversations that started months earlier and continue in parallel. Firms that build their response around the paper alone are answering a question that has already moved on. Read the speeches, the board minutes where published, the international peer positions, and the personnel changes. That is the actual brief.

Confusing the policy team with the decision-makers

The named policy leads are rarely the people whose objections kill a proposal. Supervisors, the general counsel's office, an internal economics function, and one or two senior individuals with institutional weight often carry more veto power than the team running the file. If your engagement plan lists only the policy team, you have mapped the front door, not the building.

Over-indexing on trade associations

Trade bodies aggregate positions. That aggregation strips out precisely the specificity that regulators want to hear. Worse, it tells the regulator what the median firm thinks, which is often not what your firm needs. Use the association for air cover on shared points. Do your own direct work on anything that materially affects your economics.

Building the internal position before testing it

Most firms write the board paper, then go out to sound stakeholders. By then the position is anchored and the feedback becomes something to manage rather than something to learn from. Reverse the order. Test the two or three hardest points with external stakeholders before the internal position hardens.

Assuming silence means acceptance

Regulators, and especially the quieter voices around them, often go quiet precisely when they are unpersuaded. A stakeholder who used to engage and has stopped is a signal, not an absence of one.

How to tell if your stakeholder conversations have reached the real veto players

Four tests, in order.

Test one: can you name the individuals, not the institutions?

"We have spoken to the PRA" is not an answer. Which individuals, in which functions, at what seniority, and when? If your map is at institutional level, you have not done the work.

Test two: are you hearing different things from different people?

If every conversation produces the same message, you are either talking to a coordinated group or you are only reaching the official line. Real veto players say things that contradict the official line, or add conditions the policy team has not surfaced. Divergence is the sign you are getting somewhere.

Test three: can you predict the objections before they are made?

You should be able to write, in advance, the three sharpest objections your proposal will face and name who will make them. If you cannot, your conversations have been too polite or too senior. The objections live at working level, in the second meeting, not the first.

Test four: have you tested the transition, not just the destination?

Most veto in regulatory change happens on timing, sequencing and supervisory expectations during transition, not on the end state. If your conversations have focused on the substantive rule and not on the implementation path, you have missed where the real friction sits.

What good looks like

A firm that is well prepared can, on a single page, name the ten to fifteen individuals who will shape the outcome, summarise what each of them actually thinks (not what their institution has said publicly), identify the two or three points where positions are still moving, and show where its own position is deliberately flexible to accommodate that movement.

If you cannot produce that page today, that is your next action. Not another draft of the response. The map.