Before any pick-up game as a kid -- or now for that matter -- we always set up the rules. The more complex the game, the longer everyone must wait to play.

But participants in the capital markets cannot suspend their work, starting with the 2008 financial meltdown and ending who-knows-when, as Dodd-Frank, Basel III and other regimes get sorted. So who ensures that everyone plays safely?

“While regulators are still determining what regulation will look like, the need for market surveillance is undiminished,” Richard Bentley recently wrote for TABB Group. “Traders made about €13.3 billion from market manipulation and insider dealing on EU equity markets in 2010.”

That is outrageous, but exchanges seem to be picking up some of the procedural -- if not legal and ethical -- slack.

CME Group recently fined Chicago-based high-frequency trading firm Infinium Capital Management $850,000 for violations, according to the Financial Times. “Allowing a malfunctioning [automated trading system] to operate in a live trading environment, Infinium committed an act detrimental to the welfare of the exchange,” the CME said of two incidents. Another episode included Infinium employing an unvetted algorithm in the open market.

“With respect to high frequency trading ... pre-trade checks should be built in, and regulators should be feared,” Bentley said, citing Asian markets in which practitioners regularly wonder whether authorities will allow them to trade another day. “That ‘fear factor’ is key, and there isn’t fear of regulation yet in Europe.”

Perhaps not, but there may indeed be in Asia, where Chinese authorities want to manage risk by cracking down on illegal exchanges, many of which local governments launched in the wake of the financial crisis and a CNY4 trillion stimulus package, according to The Wall Street Journal. The China Securities Regulatory Commission’s announcement of its intentions on Monday was similar to a declaration by the State Council (a.k.a. Cabinet) last week.

So are we meant to sit on the sidelines while our politicians and regulators hash out nebulous new laws and rules?

No. We participate.

Many firms don’t know that regulators want their input, as Mike Atkin of the Enterprise Data Management Council pointed out during Wednesday’s webcast “The State of the Reference Data Market - 2012” by Inside Reference Data. After all, the best way to prepare for regulatory reform is to help shape it from within the legal process.

What form would you like to see reform take? How will you let authorities know?