REGULATION BY SURVEY.

The world has changed dramatically since Congress promulgated the Securities Act of 1933 and the Securities Exchange Act of 1934--especially in the realm of financial technology. Regulators have struggled to address and close the regulatory lag that exists between financial innovation and regulation. Detecting wrongdoing, understanding market behavior, and learning investor preferences have always been and continue to be challenges in closing this gap. This Article recommends supplementing existing federal securities law with a novel form of market surveillance that I have termed, "regulation by survey," which involves the surveying by regulators of investors for purposes of gaining a deeper understanding of what is occurring within securities markets. The benefits of regulation by survey are plentiful; it improves regulator surveillance and understanding, promotes market confidence, and allows investors to engage in improved decision-making. Although several concerns exist regarding regulation by survey--namely that it detects injuries after they have occurred, depends on investors to provide meaningful information, permits trolling and manipulation, and creates administrative costs--its benefits far outweigh any concerns. This Article contributes to the existing literature in three main ways. First, it proposes "regulation by survey," a unique form of market surveillance that would not have been possible at the time of the passage of the Securities Act of 1933 and the Securities Exchange Act of 1934. Second, it identifies three emerging areas of securities regulation with market transparency and market surveillance concerns--the regulation of robo-advisers, crowdfunding, and virtual worlds--and it suggests that these emerging areas be used as a proving ground for regulation by survey. Third, it discusses the benefits of a novel theory of regulation, i.e., regulation by survey, that can be used widely throughout the realm of securities law and beyond. [ABSTRACT FROM AUTHOR]