The adoption of the twin peaks model in the regulation of South African financial markets : a comparative analysis.

Over two decades ago, a number of countries have changed their financial regulatory models. The growing complexity of financial products, the increasing challenge of regulating large financial conglomerates, and the repercussions of the 2008 Global Financial Crisis, amongst other factors, have made regulatory reform a key priority for many economies. A move towards the Twin Peaks model of financial regulation has been one of the trends in recent years. This model sees regulation split into two broad functions which are market conduct regulation and prudential regulation. South Africa adopted the Twin Peaks financial regulatory model in 2017 as a way of strengthening its financial regulatory model. By adopting the Twin Peaks model, South Africa has become the eighth and the first developing country to adopt the financial regulatory model. The adoption of the Twin Peaks financial regulatory model in South Africa was mainly inspired by the effects of the 2008 Global Financial Crisis. This study undertakes a comparison of the Twin Peaks model structure in South Africa with the structure of its counterparts, which are Australia, United Kingdom and the Netherlands. In doing so, the study identifies the strengths and possible weaknesses of the model in South Africa. The study discusses the extent to which the South African Twin Peaks model reflects international experience. The study traces the evolution of the financial markets and its regulation. It also delves into the main models of the regulation of financial services industry including the Twin Peaks model, which is the focus of the study. The rationale of South Africa’s adoption of the Twin Peaks model is also considered. The Twin Peaks model was introduced in South Africa through the enactment of the Financial Sector Regulatory Act. This legislation reveals that South Africa has drawn increasingly on international experience, particularly the structural design and the cooperation and collaboration of the regulators. It also reveals similarities, notable differences as well as characteristics that might be regarded as unique to South Africa. The similarities reveal that the South African Twin Peaks greatly aligns with that of its counterparts. This is exemplified through the cooperation and coordination between the regulators and the relationship between the regulators and the government amongst others. The study explores insights and lessons to South Africa which can be learnt from its counterparts like the need for effective coordination amongst the Twin Peak regulators. Thereafter, the study puts forward recommendations for reform, which can enable the effective implementation of the Twin Peaks financial regulatory architecture.Thesis (MA) (Laws) -- University of Fort Hare, 202