The context of this study is on Local Governments (PBTs) in Kelantan. Local governments are administrators at the third government level in the Malaysian administration system. Among the administrative functions of the local government is enact of regulation. Hence, this study focuses more on the formation of better regulations at the local level, particularly in relation to state policies. ‘Better Regulatory Practices’ agenda are standards of regulatory affairs based on trained people who understand their professional role and work in an environment that follows the standards and processes. The importance and requirements of better regulatory practice are seen as critical at local government level to produce optimum impact in providing professional services and meeting the needs of the people and all other stakeholders. The scope of the study is about the process of setting up the By-laws framework at the PBT level in Kelantan. This study will identify the challenges, limitations and potentials in establishing existing regulations. This study will then propose some of the new approach such as Co-regulation, Co-reflection and Delegate of Responsibility in producing better regulation thus achieving optimum balance between regulatory requirements, expected target profiles, timely execution, and accurate results with the help of enhancement values, to achieve efficiency and effectiveness in PBTs service.