The existence of both principles$-$based and rules$-$based approaches to regulation has significant practical impacts on the compliance function and the staff who work within it$.$ For example, in pursuing the objective of customer fairness, under a rules$-$based approach there would be a set of rules to support this, while under a principles$-$based approach the requirements would be less clearly defined.

The practical impacts of these different approaches are made more complex by the outcomes$-$focused approach, which is increasingly being adopted by regulators.

a$)$ Summarise what is meant by each of the three different regulatory approaches referred to in the above statement.

b$)$ Examine the aspects of each of these approaches on which the regulator$($s$)$ would primarily focus when assessing adherence to regulatory requirements within a regulated firm.

c$)$ Briefly compare and contrast the practical impact of each of these approaches on the compliance function of a regulated firm, identifying the potential benefits and potential difficulties of each.