Directives are one of the most important ingredients in the EC legislative menu. From a structural perspective, they contain both prescriptive provisions and provisions allowing Member States (hereinafter: ‘the MS’) for flexibility at the implementation stage (Article 249 EC Treaty). This margin of choice is usually an outcome of the legislative process design intended to accommodate opposing interests and demands of 27 different MS and also that of the EC institutions, competing with each other for reputation or other reasons. Another explanation might lie in competence limits of the EC legislators. Assuming away these two explanations, being a domain of political economy and constitutional studies respectively, this paper puts forward another explanation founded in the regulatory literature and informed by the option theory. Accordingly, this built-in element of flexibility can be viewed as a ‘regulatory option’ being a rational institutional choice made by a utility-maximizing EU legislator. Regulatory option is a means by which an imperfectly informed EC legislator delegates final legislative choice to MS who potentially have superior information. The central claim of this paper is that if certain institutional preconditions are in place, regulatory options may be efficient strategy for attaining policy objectives in the multilevel governance setting.