People Moves

UK Regulator Gets New Boss

Tom Burroughes, Group Editor, London, 23 June 2020

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The new top regulator has been the CEO of the London Stock Exchange and prior to that, worked in the Treasury, handling matters such as the UK's international relationships and crucially, looked at the European connections. This area is likely to be closely watched as the UK works towards trade deals.

The UK government yesterday named London Stock Exchange chief executive Nikhil Rathi as permanent CEO of the Financial Conduct Authority. He is taking over from Andrew Bailey, who is now governor of the Bank of England.

The FCA’s new boss had served as director at the financial services group at the UK Treasury department from September 2009 to April 2014, before heading to the regulator. At the Treasury he led its work on the UK’s international and European Union financial services interests.

He is expected to take up his new role in the autumn, the FCA said in a statement yesterday. 

“Nikhil has been closely involved in guiding the FCA’s development through his roles on our practitioner panel and markets practitioner panel, and brings both private sector management skills and experience of domestic and international regulatory policymaking,” Charles Randell, chair of the FCA, said. “I would also like to thank Christopher Woolard for steering the FCA through its initial response to COVID-19 with great energy and skill. He has been an exemplary leader in this very difficult period.”

Rathi said: “In the years ahead, we will create together an even more diverse organisation, supporting the recovery with a special focus on vulnerable consumers, embracing new technology, playing our part in tackling climate change, enforcing high standards and ensuring the UK is a thought leader in international regulatory discussions.”

Global fund data and technology provider FE fundinfo welcomed the appointment and urged the new CEO to embrace the case for fund “equivalency” as part of government talks on a post-Brexit set of trade deals. 

“Within the funds industry, clarity surrounding on-going regulations, particularly when it comes to equivalence with Europe post-Brexit, should be an immediate priority. UK-based funds will lose UCITS status and passporting rights, and more proportionality in things like MiFID II client reporting are needed,” Mikkel Bates, regulations manager at FE fundinfo, said.

“Additionally, foreign funds wishing to do business in the UK also need clarification on what they must adhere to, and when. The FCA has already taken steps to be more realistic about the contents of PRIIPs KIDs and on the “10 per cent reporting rule” under MiFID II, so it has shown that it is prepared to be practical when necessary. We hope that Mr Rathi will use his influence and experience in the forthcoming negotiations to ensure the UK’s equivalence is assured.”

(Editor's note: The new man joins in turbulent times caused by the pandemic and the rowback - in some ways - from globalisation. The UK is working towards trade deals as the Brexit process continues, and as the story shows, issues such as regulatory equivalence/mutual recognition with the EU are likely to be hot items. The FCA must also evolve how it relates to regulators in such important hubs as Singapore and the US. The COVID-19 pandemic shows how important digital technology in finance is. The UK must stay on the front foot competitively. The way certain rules were suspended because of COVID-19 might also suggest that certain forms of red tape could be dispensed with permanently. The controversies over the closing of open-ended property funds and the Neil Woodfood saga also suggest that the FCA still has work to do in assuring investors that the rules are fit for purpose. Add in the underlying story of how citizens fund retirement when the public sector is awash in debt, and the FCA's new CEO is going to be busy.)

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