When you use separate paragraphs for each idea, you show your reader how the regulation is organized and which ideas are more important. Use paragraphs to help your reader understand which topics are important. Vertical lists are much more appealing visually and easier to read than running text. They make your documents appear less dense and make it easier to spot main ideas. They are also an ideal way to present items, conditions, and exceptions.
Vertical lists are also helpful in clarifying the chronological order of steps in a process.
However, you can over-use vertical lists. Remember to use them to highlight important information, not to over-emphasize trivial matters. Use vertical lists to attract the reader's eye to important information and to break up large pieces of information.