Jamaica is extending the pilot phase of the twin peaks regulatory model through 2025, dividing prudential regulation to the Bank of Jamaica and market conduct oversight to the Financial Services Commission.

The process involves joint examinations, staff training, technology testing, and legislative work, with full implementation now expected by 2026 due to legislative delays.

The framework also includes creating a special resolution regime to manage failing financial institutions, with related legislation currently awaiting parliamentary action.

The pilot phase of the twin peaks regulatory framework has been extended into 2025 as the Bank of Jamaica (BOJ) and Financial Services Commission (FSC) continue to get accustomed to their future responsibilities.

The twin peaks framework will see the BOJ’s regulatory scope expanded to cover the prudential regulation of the entire financial sector while the FSC will oversee market conduct and consumer protection of financial institutions. The BOJ currently governs the deposit-taking industry (banks and building societies), microcredit firms, cambios, remittance agencies and bill payment providers while the FSC governs the securities industry, insurance industry, pensions and corporate service providers.

“Preparation focuses on enhancing the capabilities of BOJ and FSC employees to discharge their responsibilities within their respective organisations under the new regime. In 2024, several capacity-building activities were successfully undertaken, and further activities are ongoing in 2025. These include specialised training for BOJ staff on non-bank financial sector supervision and expanded access to FSI Connect courses, including those relating to insurance oversight,” according to the Government of Jamaica’s (GOJ) March 2025 Annual Report (Form 18-K) submitted to the United States Securities and Exchange Commission (SEC).

The twin peaks regulatory model is being implemented in four phases known as preparation (phase 1), pilot (phase 2), practicum (phase 3) and implementation (phase 4).

The pilot phase began last year when the BOJ conducted a prudential examination, in collaboration with the FSC, of Scotia Jamaica Life Insurance Company Limited (insurance company) in October 2024 and Barita Investments Limited (securities dealer) in May 2025. The FSC did a market conduct examination of National Commercial Bank Jamaica Limited (deposit-taking institution) in November 2024.

This pilot phase also saw the issuance of a new consultation paper on the revised standard of sound practice for effective corporate governance of deposit-taking institutions and financial holding companies by the BOJ in December 2024.

The extended 2025 pilot phase will see the joint prudential examination of Jamaican Money Market Brokers Limited, trading as JMMB Investments (securities dealer) and a market conduct risk-based supervision thematic studies, in collaboration with the FSC, of The Bank of Nova Scotia Jamaica Limited (Scotiabank Jamaica) and Sagicor Bank Jamaica Limited (two deposit-taking institutions). There will also be development of policies related to the corporate governance framework for non-bank financial institutions and standards of best practice for complaints handling. Phase one and phase two are being executed at the same time.

Phase three will involve the secondment of BOJ and FSC employees between both regulators to provide on-the-job training and expand cross-agency understanding of the different supervisory practices.

Phase four is the period when the new regulatory model becomes operational and the operational structures and detailed work processes are adopted.

The implementation of the new regulatory framework was originally announced in January 2023, weeks after fraud allegations came to light with securities dealer Stocks and Securities Limited. Lieutenant Colonel Keron Burrell was seconded from the BOJ to be the executive director of the FSC while the FSC’s board was refreshed with BOJ Governor Richard Byles chairing the FSC’s board.

While former Finance Minister Dr Nigel Clarke indicated that this process should have been completed in 18 to 24 months, this timeline is expected to be completed in 2026. Byles explained at an October 2024 capital markets conference that this new timeline was meant to reflect the onerous legislative process in Jamaica which is needed to bring this framework into place.

Byles indicated that the BOJ would seek international advice to structure the whole legislative package on the aspect of market conduct and consumer protection. JMMB Group Limited’s 2025 annual report revealed that the BOJ sought additional technical assistance from the Inter-American Development Bank on the implementation of the twin peaks regime. The BOJ is currently awaiting feedback from the Ministry of Finance & Public Service on the latest draft cabinet submission prepared for twin peaks.

The GOJ annual report revealed that the technology working group is currently in a proof-of-concept (POC) testing cycle with SQL power for a supervisory technology solution for both regulators. After this POC cycle, a review will be done to examine if the technology is suitable for both regulators.

Both regulators are also working on the development of the special resolution regime (SRR) which is meant to establish a framework to resolve the failure or failing financial institutions. The Financial Institutions (Resolution & Winding up) Act, 2024 was tabled in the Senate in June 2024, but the Senate is currently on summer recess before the country’s general election. The FSC posted a fixed term contract in June on Caribbeanjobs.com for a senior policy analyst with a focus on the SRR.