Australia adopts a functionally-based model – the ‘twin peaks’ model – under which the functions
for financial regulation are consolidated into two regulators: the Australian Securities and
Investments Commission (ASIC), which is responsible for the regulation of companies, market
conduct and consumer protection; and the Australian Prudential Regulation Authority (APRA), which
is responsible for prudential regulation. Under this model, the central bank, the Reserve Bank of
Australia (RBA), remains responsible for monetary policy and financial stability, including ensuring a
safe and reliable payments system.  
The two other models with which the twin peaks model is usually compared are the institutional
model, under which the different sectors - namely, banking, insurance and securities - are
supervised by different regulators, and the integrated model, under which supervision is
consolidated in a single integrated regulator, or ‘super-regulator’, as was previously the case in the
United Kingdom before it adopted the twin peaks model.2  
Under the twin peaks model, it is necessary to ensure that the objectives of each regulator and the
boundaries or ‘regulatory perimeters’ between them are clearly defined.3 This is because a market
participant may be regulated by both regulators. Further, to ensure that comprehensive supervision
is achieved and that issues do not fall between the cracks, it is necessary to achieve effective
coordination between the regulators. This requires consultation, information-sharing and mutual
cooperation in areas such as supervision and enforcement action.