An SRO at a Crossroads: The Jamaica Stock Exchange Under Twin Peaks.

The structural position the JSE actually occupies

Most discussions of the Jamaica Stock Exchange focus on what it does — operates a stock market, lists companies, processes trades, publishes prices. Those operational descriptions are accurate, but they obscure the structural position the JSE actually occupies in the regulatory architecture. That structural position is what the Twin Peaks transition makes unavoidable, and understanding it precisely is the precondition for any serious discussion of how the capital market should be regulated after the cutover.

The JSE is, formally, a self-regulatory organisation recognised (SRO) under the Securities Act. The Securities Act vests in the JSE specific regulatory functions, including the operation of an organised market for the trading of securities, the establishment and enforcement of rules governing market conduct, the listing and continued obligations of issuers admitted to trading, and the supervision of member-dealers transacting on the exchange. These functions are statutory functions delegated by the Securities Act to the JSE under the supervisory oversight of the Financial Services Commission. They are not commercial activities of a private company. They are regulatory functions exercised under statutory authority.

At the same time, the JSE is a publicly listed for-profit company whose ordinary shares trade on the Main Market that the JSE itself operates. The JSE has its own listed issuer obligations to its own listing rules. It has its own shareholders, including institutional investors and members of the investing public. It has its own commercial strategy, including the development of new market segments, the operation of related companies, and the pursuit of revenue from listing fees, trading fees, market data, and other commercial activities. These are commercial activities of a private company answerable to its shareholders, not regulatory functions.

The structural tension is therefore not theoretical. The same institution that exercises regulatory functions over listed issuers is itself a listed issuer subject to those functions. The same institution that approves listing applications competes commercially for listing fees. The same institution that supervises member-dealers trading on its market depends commercially on the trading volumes those member-dealers generate. The same institution that conducts market surveillance is operationally housed within a for-profit company whose financial performance is itself a market-relevant indicator. Each of these tensions has been managed under the existing regulatory architecture through a combination of governance arrangements, separation protocols, and supervisory oversight by the FSC. The Twin Peaks transition does not create the tensions. It creates the framework within which they must be re-examined.

Why the international evidence base does not provide a clean answer

Article 4, 5 and 6 of this series examined the Twin Peaks experience in Australia, the United Kingdom, the Netherlands, New Zealand and South Africa. None of these jurisdictions has a stock exchange in the same structural position as the JSE. The Australian Securities Exchange is a listed company, but its supervisory functions over listed issuers and member-dealers are substantially constrained relative to those of the JSE, with significantly more direct supervisory engagement by ASIC. The London Stock Exchange Group is a listed company whose supervisory functions have been progressively transferred to the FCA over the past two decades. The Johannesburg Stock Exchange operates an SRO model under FSCA oversight that is closer to the JSE’s position but operates in a much larger and more diversified market. The Euronext exchange, which operates the Amsterdam exchange, is a multi-jurisdictional listed company subject to the AFM and to ESMA. The NZX is a listed company with SRO functions broadly comparable to the JSE’s but in a much smaller market.

Each of these jurisdictions has resolved the tension between commercial and regulatory functions in a different way, and the resolution in each case is shaped by local circumstances that do not map directly onto Jamaica’s. The international evidence base demonstrates that there are multiple workable models — direct conduct regulator supervision with minimal SRO functions, SRO functions retained but with statutory ring-fencing, SRO functions transferred to a separate market integrity body, hybrid arrangements with shared functions, and others. What the evidence does not provide is a single template that Jamaica can adopt. The structural position the JSE occupies is, in important respects, distinctive to Jamaica, and the Twin Peaks transition will require Jamaica to make its own architectural choices on the capital market question.

That is not a counsel of despair. It is the diagnostic frame within which the question must be approached. The questions are not whether Jamaica should follow Australia, or the United Kingdom, or South Africa. The questions are: which structural tensions in the JSE’s current position are genuinely problematic in operational terms; which can be resolved through governance arrangements within the existing institutional framework; which require statutory intervention; and what shape that statutory intervention should take. Each of these questions has multiple defensible answers. None of them has a default answer that international precedent supplies.

The four questions Twin Peaks brings to the surface

The Twin Peaks transition does not require Jamaica to resolve every question about the JSE’s position immediately. It requires Jamaica to engage with four specific questions that the new architecture brings to the surface.

The first question is about market surveillance. Under the existing arrangement, the JSE’s Regulatory and Market Oversight Division conducts market surveillance, monitors trading patterns for evidence of market abuse, and refers suspected market manipulation, insider dealing or other market integrity breaches to the FSC for investigation and enforcement. This arrangement has functioned, by and large, but it sits inside a for-profit company whose commercial performance depends on trading volumes that effective surveillance might restrict. International best practice on this point has converged toward a model in which real-time market surveillance is conducted by an independent body — either the conduct regulator directly, or a market surveillance utility independent of the exchange. The Twin Peaks transition is the natural occasion to consider whether market surveillance should be transferred from the JSE to the new conduct FSC, or whether structural ring-fencing within the JSE provides adequate independence. The choice has cost, capability and credibility implications that need to be examined explicitly rather than left to evolve.

The second question is about listing rule administration. The JSE establishes listing rules, applies them to listing applicants, monitors continued compliance by listed issuers, and takes enforcement action where rules are breached. This is a substantively regulatory function exercised by a commercial entity that itself competes for listing business with regional and international exchanges. The competing-for-listings dimension creates a structural pressure to keep listing standards competitive with regional alternatives, which in some circumstances may produce pressure toward standards that are commercially attractive but supervisorial inadequate. The Twin Peaks transition can address this through several options: maintaining the existing arrangement with enhanced FSC oversight; transferring listing rule enforcement to the FSC while retaining administration with the JSE; transferring both functions to the FSC; or establishing a separate listing authority. Each option has implications for market efficiency, capital formation costs and supervisory rigour.

The third question is about the SRO oversight regime itself. The current FSC oversight of the JSE as an SRO is established by the Securities Act and operates through a combination of approval requirements for material changes to JSE rules, supervisory engagement with the JSE’s regulatory functions, and information-sharing arrangements. The intensity of this oversight has been moderate by international comparison. Twin Peaks creates the opportunity, and arguably the obligation, to upgrade SRO oversight to international standards. The IOSCO Principles for the Regulation and Supervision of Securities Markets set out specific expectations for SRO oversight including the regulator’s right to inspect SRO operations, the requirement for SRO independence from member firms, the requirement for SRO governance arrangements that prevent commercial considerations from influencing regulatory decisions, and the requirement for SRO accountability to the supervising regulator. Aligning Jamaica’s SRO oversight regime with the IOSCO Principles is a natural element of the Twin Peaks transition that should not be deferred.

The fourth question is about the JSE’s own commercial governance. As a listed for-profit company exercising regulatory functions, the JSE’s governance arrangements need to be designed to manage the conflicts that this position inherently produces. The current governance arrangements include separation between the regulatory functions and the commercial functions, board composition requirements, fit-and-proper requirements for senior management, and disclosure obligations on related-party transactions. Whether these arrangements are sufficient under the post-Twin Peaks regime, whether they need to be enhanced, and whether they should be set out in statute rather than left to internal governance arrangements are all open questions. The post-cutover supervisory engagement between the new conduct FSC and the JSE will likely test these arrangements in ways that previous supervisory engagement has not.

What this means for listed issuers

The four questions above are about the structural position of the JSE itself. They have direct implications for the more than seventy entities currently listed across the JSE’s various market segments. Four implications are worth examining specifically.

The first is on listing rule expectations. Whichever architectural choice is made, the listing rules themselves are likely to be progressively upgraded toward international standards over the post-cutover period. The IOSCO Principles, the IOSCO Statement of Principles on Continuous Disclosure, the IFRS Foundation’s framework for sustainability disclosures, and the emerging international consensus on board independence, audit committee structure, and beneficial ownership transparency all represent direction-of-travel benchmarks. Listed issuers whose continuous disclosure practices, board governance arrangements and audit committee effectiveness already meet these standards will face a more comfortable post-cutover environment than those whose practices have settled into the historical Jamaican baseline.

The second is on supervisory data flows. Under the post-Twin Peaks regime, the new conduct FSC will likely require more granular and more frequent supervisory data from listed issuers than the FSC currently does. Cash management policies, related-party transaction registers, board attendance records, audit committee meeting minutes, and beneficial ownership data are all candidates for enhanced supervisory reporting. Listed issuers should expect this and should prepare the data infrastructure to produce it on supervisory request rather than building it under enforcement pressure.

The third is on enforcement exposure. The FSC’s enforcement powers under the post-Twin Peaks regime are expected to be substantially upgraded, with civil penalty calibration moving toward international benchmarks. Continuous disclosure breaches that today produce supervisory engagement and limited financial consequence may, after the cutover, produce material civil penalties. Listed issuers whose continuous disclosure practices include systematic late filings, ambiguous material information disclosures, or inconsistent compliance with listing rules should treat this as a remediation priority for 2026, not a post-cutover concern.

The fourth is on board-level governance. The international direction of travel on listed issuer governance is unambiguous. Board independence requirements are tightening. Audit committee competency requirements are tightening. Senior management accountability requirements are tightening. Boards of Jamaican listed issuers that benchmark their current governance arrangements against the FCA’s UK Corporate Governance Code, ASX’s Corporate Governance Council Principles, or the JSE Limited’s South African listing rules will identify gap areas where the post-Twin Peaks Caribbean regime is likely to converge with international practice over the coming decade.

What this means for member-dealers

The questions above also have implications for the member-dealers operating on the JSE — the firms whose primary business is securities dealing on the exchange and whose supervision sits at the intersection of multiple authorities under the post-Twin Peaks regime. Three implications are particularly direct.

The first is on triple supervision. After the cutover, member-dealers will be supervised prudentially by the BOJ, conduct-supervised by the new FSC, and SRO-supervised by the JSE on matters within the JSE’s continuing remit. Each of the three supervisors will have its own examination cycle, its own reporting expectations, and its own enforcement powers. Member-dealers whose internal regulatory engagement function was sized for FSC engagement will need to reassess whether that function is adequately resourced for triple supervision. Internal escalation pathways for supervisory matters need to accommodate the parallel reporting lines. Senior management coordination on supervisory engagement needs to anticipate the operational complexity that triple supervision produces.

The second is on client asset arrangements. The SSL diagnosis covered in Article 2 of this series identified weaknesses in the client asset segregation, custody and reconciliation regime as a contributing factor to the failures that motivated the Twin Peaks adoption decision. The post-cutover regime is likely to upgrade requirements on member-dealers in this area materially — independent custody, mandatory daily or weekly reconciliation by an independent party, public reporting of client asset balances, and direct rights of action for clients in the event of insolvency. Member-dealers whose current client asset arrangements rely on internal segregation, periodic reconciliation, and limited external assurance should anticipate that these arrangements will be tested under the new regime and should commission independent reviews proactively.

The third is on conduct framework expectations. The Consumer Duty referenced in Article 5 is the leading-edge international benchmark for conduct supervision of retail-facing financial services firms. Member-dealers serving retail clients should expect that the post-cutover Caribbean conduct regime will progressively converge toward Consumer Duty-equivalent standards on product governance, fair value assessment, communications quality, and customer outcomes. Suitability frameworks, sales practices, vulnerable customer policies, and complaints handling processes will all need to mature toward international benchmarks. Member-dealers that begin this work in 2026 will be well-positioned. Those that wait for explicit regulatory direction will be late.

After the cutover, member-dealers will be supervised prudentially by the BOJ, conduct-supervised by the new FSC, and SRO-supervised by the JSE. Each supervisor will have its own examination cycle, reporting expectations and enforcement powers.

The Caribbean opportunity

Beyond the immediate operational implications for the JSE, listed issuers and member-dealers, the Twin Peaks transition creates a strategic opportunity for the Jamaican capital market that should not be overlooked. The Caribbean financial sector competes for international capital — sovereign issuers, multilateral funding, regional listings, cross-border investment flows — on multiple dimensions. Regulatory credibility is one of those dimensions. A post-Twin Peaks Jamaican capital market that operates to international standards on market surveillance, listing rule enforcement, SRO oversight and member-dealer supervision will compete more effectively for that capital than the Jamaica of the pre-cutover era.

That competitive positioning matters because the Caribbean capital market is structurally smaller than international peers, and the cost of capital advantage that flows from regulatory credibility is materially valuable. International institutional investors apply discount factors to emerging market jurisdictions based on perceived regulatory robustness. Sovereign issuers face funding cost differentials based on the perceived integrity of their domestic capital markets. Cross-border listings face regulatory equivalence considerations based on the perceived credibility of supervising authorities. Each of these channels translates directly into the cost of capital available to Jamaican issuers, the funding cost faced by the Government of Jamaica, and the willingness of regional capital to deploy through Jamaican infrastructure.

The Twin Peaks transition is therefore not only a regulatory event. It is a capital market repositioning opportunity. The institutions, the regulators, the market operators and the issuers that engage constructively with the transition — that operate to the standards the new regime will require, that build the data infrastructure the new regime will demand, that commission independent reviews against international benchmarks ahead of supervisory engagement — will collectively reposition the Jamaican capital market in ways that compound over the decade following the cutover. The institutions that treat the transition as a compliance obligation rather than a strategic opportunity will find themselves at the back of that repositioning rather than at the front.

Closing this article, and what comes next

This article opens Act III of the series with the most consequential single question the Twin Peaks transition raises: how should the Jamaican capital market be regulated after the cutover. The four questions identified — market surveillance, listing rule administration, SRO oversight regime, and JSE commercial governance — are the structural questions that will shape the post-cutover capital market for years. The implications for listed issuers, for member-dealers, and for the wider Caribbean capital market opportunity are direct and operationally significant.

The next two articles in this series drill deeper into the technical regulatory questions. Article 8 examines Jamaica’s current capital market regulation against the IOSCO Objectives and Principles of Securities Regulation — the international standard against which all securities regulators are assessed — and identifies the specific principles where Jamaica’s current arrangements fall short. Article 9 examines investor protection in a Twin Peaks world, including the consumer redress mechanisms, complaints authorities, and compensation arrangements that the international evidence base has demonstrated to be necessary supplements to architectural reform. Together, the three articles of Act III translate the international evidence base assembled in Act II into a concrete diagnostic and prescription for the Jamaican capital market under Twin Peaks.

 

PARTNER WITH DAWGEN GLOBAL Capital Market Readiness for the Post-Cutover Regime The structural questions Twin Peaks brings to the Jamaican capital market are unavoidable. Listed issuers, member-dealers, and the JSE itself will operate under a materially different supervisory regime after the cutover. The institutions that engage constructively with the transition will reposition themselves competitively for the decade that follows. Dawgen Global brings audit and assurance heritage with deep capital market regulatory advisory experience to help boards, audit committees, senior management and control functions build to the standards the new regime will require — Big Firm capabilities, with Caribbean understanding. Six advisory engagements designed for this moment: ▸  Listed Issuer Disclosure & Governance Review — independent assessment of continuous disclosure practices, audit committee effectiveness, board independence and beneficial ownership transparency against international standards expected to feature in post-cutover listing rule reform. ▸  Member-Dealer Triple-Supervisor Operating Model Design — internal regulatory engagement frameworks designed to operate under prudential supervision (BOJ), conduct supervision (FSC), and SRO supervision (JSE) concurrently, including supervisory communications protocols and senior management coordination. ▸  Client Asset Custody & Segregation Independent Review — independent examination of client money, securities custody, segregation arrangements, reconciliation processes and insolvency-scenario rights of action against post-SSL benchmarks expected to feature in member-dealer reform. ▸  Capital Market Architecture Advisory — for policy-makers, regulators and market operators engaging with the Twin Peaks capital market design, comparative analysis of international SRO models, market surveillance options, and listing authority arrangements. ▸  Beneficial Ownership Transparency Programme — for listed issuers and licensed entities, end-to-end review of beneficial ownership information collection, verification, maintenance and disclosure ahead of enhanced supervisory expectations. ▸  Audit Committee Effectiveness Review — independent assessment of audit committee competency, agenda discipline, external auditor engagement and reporting quality against international corporate governance standards. Begin the conversation today. Email: [email protected]

COMING NEXT IN THIS SERIES

Article 8  —  Measuring Jamaica Against IOSCO: A Principles-Based Diagnostic

The IOSCO Objectives and Principles of Securities Regulation are the international benchmark against which every securities regulator is assessed. The next article in this series measures Jamaica’s current capital market arrangements against the 38 IOSCO Principles, identifies the principles where current practice falls short of international standards, and translates those gaps into the legislative and operational reforms the post-cutover regime should prioritise. The diagnostic is technical, and the implications are direct.

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