The Practice Period: A Distinctive Caribbean Approach to Regulatory Transition

Most countries that have adopted Twin Peaks waited for the legislation before changing how they supervise. Jamaica is doing it differently. Two years before the statutes arrive, the Bank of Jamaica and the Financial Services Commission are operating a structured Practice Period — joint examinations, jointly developed standards, capacity-building, cultural alignment — that builds the new regime in operational terms first and codifies it in law afterward. It is the most consequential supervisory innovation Jamaica has produced in a generation, and it deserves to be understood on its own terms.

The problem the Practice Period solves

When a country decides to adopt Twin Peaks, it confronts a timing problem that has tripped up every adopter. The architectural decision can be made quickly. The legislative drafting takes years. South Africa’s transition from policy paper to live cutover was six years. The United Kingdom moved from the 2010 Vickers Commission to the 2013 Financial Services Act in three years. Australia took two years from announcement to APRA’s establishment. Even on the optimistic end of that range, the gap between political commitment and legislative reality is long enough that two distinct risks compound.

The first risk is that capacity to operate the new model does not exist on Day One of the cutover. Twin Peaks requires the prudential regulator to supervise institutions it has never supervised before — securities dealers, insurers, pension funds. It requires the conduct regulator to supervise institutions it has never supervised in conduct terms before — banks, building societies, deposit-taking institutions. New supervisory tools must be built. New examination methodologies must be designed. New data flows must be established. New cultures must be developed. None of this happens by statutory commencement order. If it has not been built by the cutover, the cutover delivers a structure without substance.

The second risk is that consumer protection gaps accumulate during the legislative interval. The diagnosis that motivates Twin Peaks adoption — typically a financial scandal, a conduct failure, a stress event — does not pause while Parliament drafts. Every month of delay is a month in which the very gaps the new architecture is designed to close remain open. The Minister of Finance acknowledged this directly in 2024, noting that the legislative framework for comprehensive consumer protection of financial services was not in place and that the gap needed to be addressed urgently.

Jamaica’s response to these two risks is the Practice Period. Rather than wait for the Twin Peaks legislation and then begin building capacity, the BOJ and FSC are building capacity now — under the existing legal framework, but in operational arrangements that anticipate the new one. The Practice Period is structured in four formal phases: Preparation, Pilot, Practicum, and Implementation. Each phase has defined outputs. The Pilot phase began in 2024 with the BOJ-led prudential examination of Scotia Jamaica Life Insurance Company in October of that year, and the FSC-led market conduct examination of National Commercial Bank Jamaica in November 2024. The Pilot continued through 2025 with the joint prudential examination of Barita Investments in May 2025. For 2025–2026, the programme has been extended to cover JMMB Investments and additional institutions across the regulated sector.

What the Pilot phase has actually produced

The Pilot phase is not a thought exercise. It has produced four categories of concrete output that any honest assessment of Jamaica’s Twin Peaks readiness must take into account.

The first is joint examination methodology. When the BOJ-led team conducted a prudential examination of Barita Investments in May 2025, it was performing supervision of a securities dealer using prudential methodologies that, after the cutover, will be the BOJ’s permanent territory. The FSC’s specialist knowledge of securities supervision was integrated into the examination team. The methodological synthesis — what does a Bank of Jamaica prudential examination of a securities dealer actually look like, and what data does it require — is being developed in practice rather than in theory. By the time the legislation enacts, the BOJ will have run multiple prudential examinations of non-bank institutions and the FSC will have run multiple conduct examinations of deposit-taking institutions. The first day of the new regime will not be the first day of dual supervision in operational terms.

The second is jointly developed service-level standards. In April 2024 the BOJ and FSC jointly developed and the BOJ issued to its licensees a comprehensive set of service-level standards for the management of automated banking machines. Performance against those standards is now publicly reported. This is, in operational terms, a market conduct rule developed by the conduct regulator (FSC), enforced through the prudential regulator’s existing licensee relationship (BOJ), and made transparent to the public through mandatory disclosure. It is, structurally, a Twin Peaks instrument operating inside a pre-Twin Peaks legal framework. The same approach can be expanded to other consumer protection issues — complaints handling timeliness, account opening standards, statement clarity, fee disclosure — without waiting for primary legislation.

The third is capacity building. Throughout 2024 and 2025, both regulators have run extensive specialist training programmes for their staff on aspects of supervision they will inherit under Twin Peaks. BOJ examiners have been trained in non-bank financial sector supervision, including specialised programmes covering insurance prudential supervision, securities dealer prudential indicators, and pension fund risk-based supervision. FSC examiners have been expanded into market conduct examination methodology covering retail banking, lending conduct, and deposit-taking institution sales practices. Access to international standard-setting body resources, particularly the Financial Stability Institute’s FSI Connect courses, has been expanded. The supervisory capability that Twin Peaks requires is being built before the cutover, not after.

The fourth is institutional culture. This is the least visible output of the Practice Period and arguably the most consequential. Twin Peaks requires two regulators to coexist in a way that does not duplicate, conflict or leave gaps. That coexistence is partly a matter of statutory architecture — clear mandates, information-sharing gateways, coordination mechanisms — but it is also a matter of how supervisors actually work together day-to-day, what assumptions they share, what professional norms they follow. The friction between APRA and ASIC in Australia, between PA and FSCA in South Africa, between PRA and FCA in the United Kingdom is documented in every published assessment of those systems. Some of that friction is unavoidable — separate regulators with separate mandates will disagree — but much of it is reducible through deliberate cultural alignment in advance. Jamaica’s Practice Period is, in part, a deliberate effort to build the cultural alignment that other adopters had to develop after the cutover, often the hard way.

Twin Peaks at the cutover delivers a structure. The Practice Period delivers the substance that the structure needs to be functional from Day One.

How the four phases work

The Practice Period’s four-phase structure is more than nomenclature. Each phase is calibrated to a specific implementation challenge.

Preparation, the first phase, established the institutional foundations: refreshing the FSC board with BOJ representation, including the BOJ Governor as Chair, building joint working groups, agreeing on a common operational framework for the period itself, and securing the resourcing and political backing required for the programme. Without Preparation, the subsequent phases would have lacked institutional weight. Preparation matters not because anyone outside the regulators sees it directly but because it determines whether the people inside the regulators are aligned, authorised and resourced to execute what follows.

Pilot is the phase the public has seen most clearly. Joint examinations. Jointly developed standards. Specific institutions selected for specific examinations. The Pilot is not a comprehensive supervisory programme — it cannot be, under existing legal frameworks. But it is a deliberate sampling: a securities dealer in May 2025, an insurance company in October 2024, a bank in November 2024. Each examination tests a different aspect of how Twin Peaks will work after cutover. Each examination produces lessons. Each lesson feeds into the methodological development of the new regime. The Pilot phase, by intent, is where the architecture is actually tested before it is codified.

Practicum is the phase that scales the Pilot into operational supervision. Where the Pilot conducts examinations on a sampling basis, the Practicum extends the new methodologies across the supervised population in a structured way. Practicum-phase examinations are still legally conducted under the existing framework but are designed in form and substance to mirror the post-cutover regime. By the time Practicum is complete, every regulated institution should have had at least one supervisory engagement under the new methodology, regardless of legal commencement of the new statute.

Implementation is the final phase: the legal cutover itself, plus the period immediately following it, during which the new statutory architecture takes effect, the institutional restructuring is completed, and any final operational gaps are closed. The deliberate aim of the Practice Period design is that Implementation should be largely an administrative event. The substantive supervisory regime should already be operational. Implementation is the day the law catches up with what the regulators are already doing.

What the Practice Period cannot do

The Practice Period is a meaningful innovation but it is not a substitute for the legislation it precedes. Three categories of work cannot be performed under the existing legal framework, no matter how thoroughly the regulators rehearse.

Statutory powers cannot be exercised before they are granted. The current FSC and BOJ Acts do not provide either regulator with the legal authority to enforce service-level standards through fines. The Twin Peaks legislation will provide that authority. Until it is enacted, breaches of jointly developed standards can be made public, can be pursued through existing supervisory tools, can affect a licensee’s relationship with its regulator — but they cannot trigger the calibrated civil money penalty regime that Twin Peaks contemplates. The deterrent effect of conduct supervision is, until the cutover, materially weaker than it will be afterwards. Institutions that read this gap as a window of regulatory leniency are mispricing the situation. The reputational and supervisory consequences of conduct failures during the Practice Period will be visible to the new regime when it begins.

Institutional restructuring cannot be completed before the legislation. The redesigned FSC, with its expanded conduct mandate covering banks, building societies, securities dealers, insurers, pension funds and other regulated entities, is a substantially larger and differently resourced institution than the current FSC. The expanded headcount, the specialist functions in market supervision and consumer protection, the technology infrastructure, the operational structure — these are post-cutover work. Practice Period activities are conducted within the resource envelopes of the existing institutions. The institutional capacity that Twin Peaks ultimately requires will only be built once the statutory mandate is in place to justify the scale.

The Special Resolution Regime cannot be operated without its statute. The Financial Institutions (Resolution and Winding-Up) Act, 2024, currently before Parliament, will establish the framework for resolving failing financial institutions in a way that protects financial stability, depositor and policyholder interests, and minimises taxpayer exposure. The Resolution regime is essential to the credibility of the prudential peak — without it, the BOJ’s prudential mandate is incomplete. The Practice Period cannot rehearse a Resolution Regime that does not yet legally exist. This is one of the most consequential pieces of legislative work outstanding, and its progress is independent of the Twin Peaks Practice.

Why the Practice Period matters for the Caribbean

The Practice Period is a Jamaican innovation but its lessons are regional. Every Caribbean jurisdiction that contemplates regulatory reform — and the list is longer than is widely appreciated — confronts the same timing problem that motivated Jamaica’s design. The legislative process is long. The political will to reform tends to be event-driven and finite. The risk of building structure without substance is real.

Trinidad and Tobago has been considering financial sector regulatory reform since the 2008 CL Financial collapse exposed gaps in insurance regulation that have only partly been closed. Barbados has a financial sector that depends, like Jamaica’s, on credibility with international counterparties and on consumer trust at home. The Eastern Caribbean Currency Union operates a single supervisory authority for indigenous banks but conduct supervision is patchy across member states. The Bahamas has been navigating its own post-Sands and post-FATF regulatory journey. Each of these jurisdictions, considering its own future architecture, has an opportunity to learn from Jamaica’s Practice Period rather than rediscover its lessons independently.

The transferable lesson is that the gap between policy decision and legal cutover is itself a regulatory product. It can be left as a vacuum, in which case it produces three years of accumulated consumer protection gaps and a Day One that arrives without operational capacity. Or it can be designed deliberately, as Jamaica has done, into a phased programme that builds capacity, develops methodology, aligns culture, and produces public-facing instruments — like the ABM service-level standards — that demonstrate to the public that the reform has begun in operational terms even before it has begun in legal terms.

This is not unique to Twin Peaks. The same logic applies to any major regulatory transition: a Special Resolution Regime, a deposit insurance scheme, a market conduct framework, an outcomes-based supervisory model. The structured pre-implementation phase, with defined sub-phases, defined outputs and public reporting, is a tool that any Caribbean jurisdiction undertaking ambitious regulatory reform should consider. Jamaica has demonstrated that it works.

The gap between policy decision and legal cutover is itself a regulatory product. It can be left as a vacuum or it can be designed.

What boards and senior management should take from this

For the Caribbean financial sector, the Practice Period changes how boards should think about Twin Peaks readiness. Three implications follow directly.

The first is that supervisory engagement during the Practice Period is not preparatory but substantive. The institutions that have been examined under the joint BOJ-FSC programme have been examined using methodologies that anticipate the post-cutover regime. The supervisory observations that emerged from those examinations will inform how those institutions are supervised after the cutover. Treating a Practice Period examination as a rehearsal — providing rehearsal-quality information, rehearsal-quality control evidence, rehearsal-quality remediation responses — is a strategic error. The information being gathered is real. The supervisory judgements being formed are real. The institutional reputation being established with the new regime begins now.

The second is that the public-facing instruments developed during the Practice Period have already started to define the conduct standards expected of Caribbean financial institutions. The ABM service-level standards are one example; comparable instruments covering complaints handling, sales practices, suitability, account opening and other consumer protection areas can be expected as the Practice Period progresses. Boards that wait for primary legislation to define their conduct obligations are reading the regulatory environment wrongly. The standards are being set now, in operational form, with public reporting, and institutions are being benchmarked against them in real time.

The third is that the strategic preparation window is shorter than it appears. The 2026 cutover is not the moment when conduct expectations begin to apply; it is the moment when the legal toolkit to enforce them becomes calibrated. The expectations themselves are being established through the Practice Period. Boards that begin their Twin Peaks readiness work after the legislation passes will be late by approximately two years. Boards that began the work in 2024 are on track. Boards that begin it in mid-2026 are, in any honest reading, behind schedule.

The wider lesson on regulatory innovation

The Practice Period is also a worked example of something larger: that Caribbean jurisdictions can innovate in regulatory design, not only adopt international templates. Twin Peaks is, in its broad architecture, a borrowed model. The four-phase Practice Period is not. It is a Jamaican design choice that responds specifically to Jamaican constraints — the urgency created by SSL, the legislative timetable realities, the need to demonstrate regulatory action while drafting continued, and the institutional capacity considerations of two regulators that must coexist productively from Day One.

That kind of design innovation is the future of Caribbean financial regulation. The region cannot import every solution to every regulatory problem from the OECD. The capital available for regulatory experimentation is larger in the United Kingdom than in Jamaica; the institutional resourcing is larger in Australia than in Trinidad and Tobago; the risk tolerance for novel approaches is, paradoxically, sometimes greater in larger jurisdictions because they have the buffer to absorb experimentation costs. But the pressure on Caribbean supervisors to deliver world-class regulatory outcomes from constrained institutional bases is very real, and that pressure is itself a forcing function for innovation. The Practice Period is one example. Others will follow.

For boards, regulators, policy-makers and capital allocators paying attention to the Caribbean financial sector, the Practice Period should change the lens through which Jamaica is viewed. Not as a follower of international regulatory practice. As an innovator within it. The outcome of the Twin Peaks transition, when it concludes, will be assessed against the international Twin Peaks family. The journey to that transition — the design of the Practice Period itself — is already being assessed against a different and arguably more important benchmark: whether emerging-market regulators can innovate around the legislative constraints that have historically delayed reform. On that question, the early evidence is encouraging.

 

PARTNER WITH DAWGEN GLOBAL Practice Period Readiness for Caribbean Institutions The institutions being examined under the BOJ-FSC joint programme are being examined using methodologies that anticipate the post-cutover regime. The supervisory observations being formed are real. The institutional reputation being established with the new regime begins now. Dawgen Global helps boards, audit and risk committees, and senior management prepare for Practice Period engagement at the standard the new regime will expect — Big Firm capabilities, with Caribbean understanding. Six advisory engagements designed for this moment: ▸  Practice Period Engagement Strategy — preparing institutions for joint BOJ-FSC supervisory examinations, including documentation of governance, conduct frameworks, and control evidence at the standard the new regime will expect. ▸  Service-Level Standards Compliance Assessment — independent review of compliance with the BOJ-FSC ABM service-level standards and forward-looking readiness for additional standards expected under the Practice Period. ▸  Conduct Framework Maturity Diagnostic — benchmarking sales practices, complaints handling, suitability frameworks and customer outcomes data against the standards being established through the Practice Period. ▸  Dual-Regulator Operating Model Design — building the internal regulatory engagement function, supervisory communications protocols, and reporting infrastructure required to operate under two specialist regulators after the cutover. ▸  Supervisory Examination Readiness — pre-examination diagnostics, control evidence packs, governance documentation and management response frameworks tailored to BOJ-FSC joint examination methodology. ▸  Caribbean Regulatory Reform Advisory — for institutions operating across multiple Caribbean jurisdictions, integrated advisory on regulatory reform programmes underway in Trinidad and Tobago, Barbados, the ECCU and the Bahamas, and how Jamaica’s Practice Period model translates to those contexts. Begin the conversation today. Email: [email protected]

COMING NEXT IN THIS SERIES

Article 4  —  Australia: Twenty-Five Years of Twin Peaks — What Worked and What Didn’t

Publishing Thursday 25 June 2026

Australia is the country that named the model and has lived with it the longest. The next article in this series examines twenty-five years of Twin Peaks in practice — the genuine successes, the high-profile failures including the Hayne Royal Commission, and the lessons that Caribbean adopters can extract from a regime old enough to have been honestly assessed.

ABOUT THE AUTHOR

Dr. Dawkins Brown is the Executive Chairman and Founder 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.

About Dawgen Global