Introduction. In the context of the national law development, the institutional regulation doesn’t prove to be enough efficient due to a number of factors: the excessive institutionalization of laws, norms and requirements by the subjects of state governance, the use of the outdated methods and regulatory mechanisms, the disintegration of the regulatory institutions, etc. In the frame of the modern scientific research, the solution of these issues is possible only in case of transformation of the legal regulation system towards the rational state governance, provision of technological support and overcoming the excessive rules. Thus, the present work aims to analyse the up-to-date concepts of the institutional regulation system taking into account its basic elements, functions and principles, which will help to detect the gaps and reasons underlying the poor efficiency of the governing process.Materials and Methods. The requirements of the current stage of the state governance development have become the materials for the research. The research methodology includes a set of general scientific and specific scientific methods: legal, dialectical, logical, institutional, system-structuring, as well as comparative legal and legalistic methods aimed at the detailed study of the regulatory processes, their substantive stages, principles and functions.Results. The analysis of the institutional regulation system activity is formed by many interacting factors, including openness of the regulatory processes, participation of the public, open discussions, unbiased assessment of the regulatory impact and expediency of the state intervention. The conducted research has made it possible to distinguish the various functions and principles of the institutional regulation, which are significant for the current stage of the state governance development. The requirements for the legal regulation system have also been defined, including the qualitative analysis of the legislation, implementation of the "smart regulation" concept, participation of the specialists of the allied sciences in the regulatory process, implementation of the modern research findings, methods and innovative technologies, as well as moderate and rational control over the efficiency of the regulatory institutions functioning.Discussion and Conclusion. The institutional governance is subject to many hierarchical factors and excessive control of the authorities. As to the practical recommendations, the following solutions seem to be the most rational: smart delegation of powers, coordination and systematisation of all regulatory stages and elements within the process of the new legal principles and mechanisms implementation supported by the participants’ proactivity and by the space for the up-to-date solutions. The present research proves to be significant for the Russian juridical science, as it implies the systematisation, enhancement and transformation of the fundamental legal principles