• University of New South Wales
  • Macquarie University
  • The University of Sydney
  • University of Technology Sydney
  • Australian National University
  • The University of Melbourne
  • Capital Markets
  • Sirca
  • Commonwealth Bank
  • KPMG
  • King & Wood Mallesons
  • Macquarie
  • Australian Government - Treasury
  • New South Wales Goverment

CIFR Research Project

Financial System Regulation- is Australia's "Twin Peaks" Approach a Model for China? - E018
Area of Interest: Market and Regulatory Performance  Lead Institution: University of Melbourne
Assessment Round: April 2013  Completion Date: 2016
Project Summary

The Global Financial Crisis and its fallout have tested the integrity and resilience of regulatory frameworks in respect of financial services and have led to significant reforms to those frameworks around the world. As financial institutions and the financial markets in China become more integrated and sophisticated, it is likely that China will need to re-consider its approach to financial regulation and review developments in other markets. Inevitably, its attention will turn to the models and reforms introduced in markets such as the United Kingdom and the United States. In this research project, we propose to consider the extent to which Australia's "twin peaks" approach to financial services regulation provides a model for reform in China. Although the focus is on China, it is expected that the findings will also be relevant to other emerging markets in Asia.



CIFR Team from Melbourne Law School (MLS) Provides Input on Financial Sector Legislative Reform in South Africa


On 27 October 2015, the South African Minister of Finance tabled the Financial Sector Regulation Bill (FSR Bill) in Parliament. When enacted, the FSR Bill will introduce a Twin Peaks model of financial sector regulation in South Africa, along similar lines to the model as it was first adopted in Australia in 1998.


The FSR Bill incorporates public comments received on the second draft, which was published in December 2014. Included in the submissions made to the National Treasury was a submission by MLS as part of a CIFR-funded research project, led by Andrew Godwin and Professor Ian Ramsay, which examines Australia’s experience with the twin peaks model and the extent to which it serves as a model for reform in China.


The adoption of the twin peaks model in South Africa will result in the creation of two regulators: a market conduct regulator called the ‘Financial Sector Conduct Authority’ and a new prudential regulator called the ‘Prudential Authority’. The South African Reserve Bank (SARB) will continue to play an important role in overseeing financial stability, ‘within a policy framework agreed with the Minister of Finance.’[1] The model will see the SARB responsible for macroprudential supervision, while the Prudential Authority will be tasked with microprudential supervision.


As noted in the detailed comments matrix published along with the FSR Bill,[2] the National Treasury accepted many of the recommendations by MLS in its submission, including recommendations in respect of the coordination arrangements between the new regulators. It is expected that the Bill will be enacted in 2016.

[1] Republic of South Africa National Treasury, ‘Twin Peaks in South Africa: Response and Explanatory Document’ (Accompanying the second draft of the Financial Sector Regulation Bill, December 2014) 6-7. 

[2] For the detailed comments matrix, see Treasury document.

Team Leader:
Mr Andrew Godwin | Senior Law Lecturer, Melbourne Law School, University of Melbourne
Professor Guo Li | Professor, Peking University Law School, Peking University
Professor Ian Ramsay | Harold Ford Professor of Commercial Law, Director of the Centre for Corporate Law and Securities Regulation, Melbourne Law School, University of Melbourne
Project Outputs:


The Centre for International Finance and Regulation (CIFR) represents a strategic link between academia, financial regulators, policy makers and industry, promoting financial sector vibrancy, resiliency and integrity, through leading research and education.

CIFR receives funding and support from the Commonwealth and NSW Governments, and its industry, university and research centre partners.



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