Does Objectives-Based Financial Regulation Imply a Rethink of Legislatively Mandated Economic Regulation? The Case of Hong Kong and Twin Peaks Financial Regulation

Capital Markets Law Journal 15(1), 2020 (for the first half) Notre Dame Journal of Legislation 46(4), 2020 (for second half)

48 Pages Posted: 13 Nov 2014 Last revised: 8 Feb 2022

See all articles by Bryane Michael

Bryane Michael

University of Hong Kong Faculty of Law

Say Hak Goo

The University of Hong Kong - Faculty of Law

Dariusz Wojcik

University of Oxford, St. Peter's College

Date Written: November 12, 2014

Abstract

Objectives-based legislation – or laws which focus on achieving particular and concrete outcomes – has become a new and important tool that financial sector regulators use to tackle large and varied financial system risks. Yet, objectives-based legislation – and the frequent principles-based regulation underpinned by such legislation – represents a stark departure from traditional ways of legislating. In this paper, we describe the problems and prospects of implementing objectives-based financial regulation in Hong Kong – in the form of a Twin Peaks regulatory structure. A focus on the objectives of achieving financial market stability and proper market conduct would require a different approach to legislating and regulating in Hong Kong (and most other countries). By describing the way Hong Kong’s legislators would adopt such objectives-based legislation putting a Twin Peaks regulatory structure in place, we hope to shed light on the broader trend in academic and practitioner circles toward thinking about how to use objectives-based legislation to tackle complex social risks. Such an approach may also reduce the use of patchworks of complex inter-agency agreements and rulemaking between traditional regulators as they try to solve large and difficult regulatory problems.

Keywords: Twin Peaks, financial regulation, objectives-based regulation, comparative financial law, government-by-results

JEL Classification: G18, G28, K23

Suggested Citation

Michael, Bryane and Goo, Say Hak and Wojcik, Dariusz, Does Objectives-Based Financial Regulation Imply a Rethink of Legislatively Mandated Economic Regulation? The Case of Hong Kong and Twin Peaks Financial Regulation (November 12, 2014). Capital Markets Law Journal 15(1), 2020 (for the first half) Notre Dame Journal of Legislation 46(4), 2020 (for second half), Available at SSRN: https://ssrn.com/abstract=2523346 or http://dx.doi.org/10.2139/ssrn.2523346

Bryane Michael (Contact Author)

University of Hong Kong Faculty of Law ( email )

Pokfulam Road
Hong Kong, Hong Kong
China

Say Hak Goo

The University of Hong Kong - Faculty of Law ( email )

Pokfulam Road
Hong Kong, Hong Kong
China

HOME PAGE: http://hub.hku.hk/rp/rp01248

Dariusz Wojcik

University of Oxford, St. Peter's College ( email )

New Inn Hall Street
Oxford, OX1 2DL
United Kingdom

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