BOJ Consulting Stakeholders on Practice Period for Twin Peaks Model of Financial Regulation

The Bank of Jamaica (BOJ) is holding consultations with key stakeholders on the Twin Peaks Model of Financial Regulation and Supervision as part of the implementation of a practice period, prior to the passage of supporting legislation.

These talks are being held with several groups, including the Insurance Association of Jamaica (IAJ), Jamaica Bankers Association (JBA), Jamaica Securities Dealers Association (JSDA) and Pension Industry Association of Jamaica (PIAJ).

This was disclosed by BOJ Governor and Financial Services Commission (FSC) Chairman, Richard Byles, during the inaugural IAJ business conference at the Jamaica Pegasus Hotel in New Kingston on Wednesday (September 11).

Mr. Byles, who delivered the keynote address during the opening ceremony, said while the Twin Peaks legislation is not expected to be enacted before 2026, it is imperative that elements of the new system be instituted prior to its passage.

These elements include improved standards relating to market conduct and consumer protection, similar to the recently introduced guidelines for the operation of automated banking machines (ABMs) by deposit-taking institutions, including commercial banks.

“Twin Peaks is really an effort to reorganise who supervises what… and what will happen is that the Bank of Jamaica will be responsible for all institutions in the financial sector, from a prudential point of view; that means balance sheets, profit and loss, that aspect of the operation of institutions in the financial network. The Financial Services Commission will be responsible for all [of the] financial sector from the point of view of market conduct and customer protection,” Mr. Byles stated.

“So, the Bank of Jamaica will have a 360-degree view of all of the financial network, prudentially, and the FSC will have a 360-degree view of all the financial network from a market conduct and customer protection point of view,” he added.

Mr. Byles said the discussions will also enable stakeholders from the various groups to raise any concerns they may have about the new regulatory model.

“It is a way for them to see what we want and for us to know what is possible, and what may be a bit too far at this point in time,” the Governor further stated.

Under the Twin Peaks Model, which was announced in 2023 by Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke, BOJ will assume full responsibility for prudential supervision of all bank and non-bank financial institutions from the FSC.

The Commission will be transformed into a new regulatory entity that supervises these institutions from the perspective of market conduct and protection of consumers of financial services.