From Sectoral Silos to Twin Peaks: Reading Jamaica’s 2026 Reform Correctly

When the Twin Peaks legislation is enacted in 2026, Jamaica will not be relabeling its regulators. It will be re-architecting how the entire financial system is supervised. Boards, securities dealers, insurers, pension trustees and listed issuers that read this reform as a name change will arrive at the cutover unprepared. Those that read it correctly — as a fundamental redrawing of supervisory mandates, powers and accountability — will use the next eighteen months to build a competitive advantage.

The reform that is actually happening

In January 2023, weeks after the alleged fraud at Stocks and Securities Limited became public, the then Minister of Finance Dr. Nigel Clarke announced that Jamaica would adopt the Twin Peaks model of financial sector regulation. The announcement landed at a moment when public confidence in Caribbean financial supervision was at its lowest point in a generation. Three years later, the architecture is still being built — but it is being built in earnest, and it will reshape every regulatory relationship in the country.

Under Twin Peaks, the Bank of Jamaica becomes the prudential supervisor for the entire financial sector. Every deposit-taking institution, every securities dealer, every insurance company, every pension fund will report to the BOJ on the safety and soundness of its balance sheet. The Financial Services Commission, in turn, becomes the market conduct and consumer protection authority — also covering the entire financial sector, but viewing it through a different lens. The FSC will set and enforce the standards by which firms treat their customers, sell their products, manage conflicts of interest and resolve complaints.

This is a complete redrawing of the regulatory map. Today, the BOJ regulates banks, building societies, microcredit firms, money services and credit bureaus. The FSC regulates securities, insurance and pensions. Each operates within its own statutory perimeter. After the cutover, both regulators will see the entire financial system — but each will look at it for different purposes. The Governor of the Bank of Jamaica described it succinctly in September 2024: a 360-degree view of the financial network, prudentially, on one side, and a 360-degree view of the same network from a market conduct and consumer protection point of view on the other.

The implementation timetable has slipped from the original 18-to-24 month estimate to 2026, reflecting the genuine complexity of the legislative drafting. As of early 2026, the BOJ has stated that drafting recommendations are approximately 95 per cent complete. The Cabinet submission is in its final stages. The legislation will follow.

The architecture is not the achievement. The architecture is the precondition for everything that comes next — supervisory powers, enforcement credibility, consumer redress, and a capital market that international investors can trust.

Why the model exists at all

The Twin Peaks idea was first articulated in 1995 by Dr. Michael Taylor, then a researcher at the Bank of England. Taylor’s diagnosis was that the United Kingdom’s sectoral regulatory model — different regulators for banks, insurers and securities firms — could not cope with financial conglomerates that crossed sector boundaries, and that combining all functions inside one super-regulator created its own problem: prudential and conduct objectives would compete inside the same institution, and prudential always won.

The first country to act on the diagnosis was Australia in 1998, which split its supervision between the Australian Prudential Regulation Authority (APRA) for safety and soundness and the Australian Securities and Investments Commission (ASIC) for conduct, market integrity and registry functions. The Reserve Bank of Australia retained monetary policy and overall financial stability. The Netherlands followed in 2002, with De Nederlandsche Bank as prudential peak and the Autoriteit Financiële Markten as conduct peak.

The 2008 global financial crisis was the stress test. Australia weathered it relatively well, and the Twin Peaks architecture took some of the credit. The United Kingdom, which had consolidated supervision into a single Financial Services Authority in 2000, did not weather it as well. The post-crisis Vickers and Wheatley reviews concluded that the unified model had failed, and in 2013 the United Kingdom split into the Prudential Regulation Authority within the Bank of England and the Financial Conduct Authority as an independent statutory body. New Zealand made a similar split in 2011. South Africa — the closest emerging market analogue to Jamaica — adopted Twin Peaks under the Financial Sector Regulation Act 2017 and went live in 2018.

So the model Jamaica is implementing is not novel. It is the prevailing architecture of the most advanced financial regulatory systems in the world. But it is not a guaranteed cure. Australia, twenty-five years in, was forced by the 2018 Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry to confront serious conduct failures that the architecture had not prevented. The United Kingdom has continued to refine its regime, most notably with the Financial Conduct Authority’s Consumer Duty in 2023. New Zealand passed the Conduct of Financial Institutions Act in 2022 to plug gaps the original split had left open. The lesson from every adopting jurisdiction is the same: the architecture is necessary but not sufficient. What matters is what is built on top of it.

The four things Twin Peaks actually changes for Jamaican boards

Strip away the policy vocabulary, and the reform changes four things in concrete, operational terms. Boards that understand these four changes will be ready. Those that do not will spend the months after the cutover in expensive remediation.

First — the regulator who turns up at your door is no longer just the FSC.

If you are a securities dealer today, your supervisor is the FSC. If you are a commercial bank, your supervisor is the BOJ. After the cutover, every regulated firm has two supervisory relationships. The BOJ will conduct prudential examinations focused on capital adequacy, liquidity, large exposures, governance, risk management and recovery planning. The FSC will conduct conduct examinations focused on disclosure, suitability, complaints handling, sales practices, conflicts of interest and customer outcomes.

This is already being practised. The BOJ-led joint examination of Barita Investments in May 2025 was a prudential examination of a securities dealer — historically the FSC’s territory. The FSC-led examination of National Commercial Bank Jamaica in November 2024 was a conduct examination of a deposit-taking institution — historically the BOJ’s territory. The Practice Period is teaching both regulators, and both regulated industries, what dual supervision feels like. The institutions that took these examinations seriously have a head start. Those that treated them as one-off exercises will find the post-cutover reality more demanding than they expected.

Second — your customer-facing operations are about to be regulated as a first-order matter, not a footnote.

In the current architecture, consumer protection sits inside the FSC’s broader prudential mandate. The institutional incentive — at the FSC and at the firms it regulates — is to focus on the metrics that get reported, and the metrics that get reported are predominantly prudential. Capital ratios, asset quality, profitability. Customer outcomes have historically been a residual concern.

Twin Peaks reverses this. The new FSC will exist for the explicit purpose of supervising how firms treat their customers. It will set service-level standards, monitor compliance, investigate breaches and impose sanctions. The April 2024 service-level standards for automated banking machines, jointly developed by the BOJ and FSC and now publicly reported, are an early sign of what is coming. The legislative gap that currently prevents the regulators from imposing fines for breaches of consumer protection standards is exactly the gap the Twin Peaks legislation is designed to close.

For boards, this means that complaints management, sales practice supervision, suitability frameworks, fair value assessment, vulnerable customer policy, and product governance will move from compliance side-issues to board-level risk concerns. They will be subject to supervisory examination. They will be subject to enforcement action. And — this is the consequential change — they will be subject to public disclosure. Performance against service-level standards is being published precisely so that the public can hold institutions to account.

Third — the cost of regulatory failure is going up.

In every Twin Peaks jurisdiction, the conduct regulator has emerged as the more visible and more aggressive enforcement agency. The Financial Conduct Authority levied £77 million in fines against TSB Bank in 2022 alone for an IT migration failure that affected customers. The Australian Securities and Investments Commission has imposed multi-billion-dollar penalties in the wake of the Hayne Royal Commission. The South African Financial Sector Conduct Authority is building a comparable enforcement profile.

The expectation that the new Jamaican FSC will follow the same trajectory is reasonable. The Twin Peaks legislation will provide statutory civil penalty powers calibrated to international benchmarks. It will expand investigative powers. It will create new offences and new enforcement pathways. It will, in all likelihood, also create a statutory consumer redress mechanism allowing customers to obtain compensation directly from institutions for conduct breaches — closing the gap that the SSL case exposed so painfully.

For boards, the strategic implication is straightforward. The risk-adjusted cost of weak conduct compliance is rising. The cost of a high-profile consumer protection failure — once the new regime is in force — will include direct civil penalties, restitution orders, customer redress, public censure, supervisory intervention, and reputational damage that travels at the speed of social media. The institutions that are still treating consumer protection as a compliance department’s problem are mispricing their own risk.

Fourth — the stock market regulatory architecture itself is being re-examined.

The reform is not just about the boundary between BOJ and FSC. The Financial Services Commission has separately announced — and gone to tender for — a comprehensive review of the regulatory arrangement of the Jamaican stock market, with the explicit objective of recommending amendments to align the framework to international standards. The review encompasses the Securities Act, the FSC’s regulatory architecture, the Jamaica Stock Exchange’s role as a self-regulatory organisation, and the supervision of listed issuers.

This is a parallel reform, but it is not separate from Twin Peaks. The two interact. The redesigned FSC will be the conduct regulator for the stock market. Its powers, its tools and its statutory mandate will all be defined by the Twin Peaks legislative package. The stock market review is, in effect, an opportunity to ensure that when the new FSC opens for business, it has the fit-for-purpose powers needed to supervise a Caribbean capital market that is more sophisticated, more international and more interconnected than the one the original 2001 FSC Act was designed for.

Listed issuers, audit committee chairs, securities dealers and institutional investors should expect a wave of consequential changes: continuous disclosure obligations codified at international standard, beneficial ownership transparency tightened, audit oversight strengthened, market microstructure rules modernised, and a credible enforcement track record rebuilt from the SSL aftermath.

The institutions that read Twin Peaks as a name change will arrive at the cutover unprepared. Those that read it as a fundamental redrawing of supervisory mandates will spend the next eighteen months building a competitive advantage.

What boards should do in 2026

There is a window. The Twin Peaks legislation is not yet enacted. The new FSC is not yet operational. The Securities Act review is in progress. This is the period in which boards can prepare without the pressure of immediate compliance deadlines. Five priorities should sit on the agenda of every audit committee and risk committee in the Jamaican financial sector this year.

Map your dual supervisory exposure. Identify, by business line, what your prudential and conduct supervisory exposure will look like under the new architecture. For diversified groups, this is non-trivial — banking subsidiaries, securities subsidiaries, insurance subsidiaries and pension administration may each have a different mix of dual supervisory touchpoints. The mapping itself surfaces gaps in board-level oversight that are easier to fix now than after the cutover.

Stress-test your conduct risk framework against international benchmarks. The Financial Conduct Authority’s Consumer Duty in the United Kingdom is the leading-edge model. The Australian Design and Distribution Obligations regime is another. Boards should ask: if the new FSC adopts an outcomes-based conduct standard along these lines, would our current framework — sales practices, suitability, product governance, vulnerable customer support, complaints handling — pass the test? The answer for most institutions, honestly assessed, is no. The remediation work is the work of 2026.

Reconsider your governance, fit-and-proper and accountability frameworks. Twin Peaks jurisdictions have universally moved toward stronger individual accountability for senior managers. The United Kingdom’s Senior Managers and Certification Regime, the Australian Banking Executive Accountability Regime, and South Africa’s incoming similar provisions all embed personal responsibility for specific business outcomes at named senior executive level. Jamaica’s Twin Peaks legislation is unlikely to ignore this trend. Boards should pre-emptively review how senior management responsibilities are documented, allocated and tested.

Audit your client asset, custody and segregation arrangements. The SSL case underscored the consequences of inadequate client asset segregation. The new statutory regime is likely to impose stricter independent custody requirements, mandatory reconciliation, and direct rights of action for clients in insolvency. Securities dealers and investment management firms that have not recently subjected their custody arrangements to independent assurance should do so this year.

Engage with the Twin Peaks transition publicly and constructively. This reform is not happening to the industry — it is happening with the industry. The BOJ-FSC consultations with the Jamaica Bankers Association, the Insurance Association of Jamaica, the Jamaica Securities Dealers Association and the Pension Industry Association are real consultations. The industry voice that is most credible in those consultations is the voice of the institution that is visibly preparing for the new regime — not the voice of the institution that is asking for delay.

The Caribbean opportunity

There is a larger story behind the technical reform. The Caribbean capital market — Jamaican-led, but extending across the JSE’s regional listings, the Eastern Caribbean Securities Exchange, and the Trinidad and Tobago Stock Exchange — is at an inflection point. Public market depth, secondary market liquidity, fixed-income market development, and listing access for SMEs all remain below the levels that comparable emerging markets achieve. The conventional explanations cite small market size and concentrated ownership. The harder, more useful explanation is that international institutional capital allocates to markets it considers credibly supervised, and the Caribbean has, fairly or unfairly, been seen as falling short of that standard.

Twin Peaks is the most consequential opportunity in a generation to change that perception. A redesigned regulatory architecture, aligned to IOSCO benchmarks, with credible enforcement and a modern Securities Act, can reset the conversation about Caribbean capital markets at the level of pension fund trustees, sovereign wealth funds and emerging-market index providers. The prize is not abstract. It is measured in basis points of cost of capital, in IPO receptivity, in the depth of secondary trading, and in the diversity of issuance — green bonds, social bonds, infrastructure financing, regional listings — that the market can support.

None of this happens automatically. It happens because boards, regulators, market infrastructure providers and policy-makers make the right choices in the next eighteen months. That is the framing every director should bring to this reform: not a compliance burden to be minimised, but a structural opportunity to be captured.

 

PARTNER WITH DAWGEN GLOBAL Twin Peaks Readiness for the Caribbean Boardroom The institutions that prepare in 2026 will own the post-cutover advantage. Dawgen Global advises boards, audit committees, risk committees and senior management across the Caribbean financial sector on the practical work that turns regulatory reform into competitive advantage. Our Twin Peaks Readiness practice combines audit and assurance heritage with deep regulatory advisory experience — bringing Big Firm capabilities and Caribbean understanding to every engagement. We can help your institution with: ▸  Twin Peaks Readiness Diagnostic — a structured assessment of your institution’s dual supervisory exposure, conduct risk framework and governance arrangements against the new regime. ▸  Conduct Risk Framework Design — building outcomes-based conduct frameworks aligned to FCA Consumer Duty, ASIC Design and Distribution Obligations and emerging FSC standards. ▸  Client Asset, Custody and Segregation Assurance — independent review and remediation of client money, custody and segregation arrangements for securities dealers and investment managers. ▸  Senior Manager Accountability and Governance Reviews — preparing senior management responsibility maps, fit-and-proper documentation, and board-level accountability frameworks. ▸  IOSCO Alignment Gap Analysis — for listed issuers, securities dealers and market infrastructure providers, benchmarking compliance against the 38 IOSCO Principles. ▸  Regulatory Engagement Strategy — supporting industry submissions, supervisory examinations and constructive engagement with BOJ and FSC during the transition. Begin the conversation today. Email: [email protected] Call: 876-929-3670  |  876-665-5926  |  US toll-free 855-354-2447 Visit: www.dawgen.global  |  47 Trinidad Terrace, New Kingston, Jamaica DAWGEN GLOBAL  |  Big Firm Capabilities. Caribbean Understanding.

 

COMING NEXT IN THIS SERIES

Article 2  —  The SSL Lesson Three Years On: What Twin Peaks Was Designed to Prevent

Publishing Thursday 28 May 2026

Three years after the SSL fraud became public, the diagnosis is clearer than the prosecution. The next article in this series examines what the Twin Peaks model is specifically designed to prevent — and why an architecture that works in theory still depends on enforcement, resourcing and political will to deliver in practice.

ABOUT THE AUTHOR

Dr. Dawkins Brown is the Executive Chairman of Dawgen Global, an independent, integrated multidisciplinary professional services firm headquartered in New Kingston, Jamaica, operating across more than fifteen Caribbean territories. With Big Four heritage and over twenty-three years of professional experience, Dr. Brown writes regularly on Caribbean financial regulation, capital markets, governance and strategy through the LinkedIn newsletter Caribbean Boardroom Perspectives.

[email protected]  |  www.dawgen.global  |  876-929-3670

About Dawgen Global