The Chancellor of the Exchequer has decided not to renew the contract of Financial Conduct Authority (FCA) chief executive Martin Wheatley, thus ending his eventful four year term at the helm of the UK’s financial watchdog.
He will step down on September 12 2015, with his duties carried out on a temporary basis from that date by the FCA’s current director of supervision and enforcement Tracey McDermott. He will continue to advise the regulator until January 2016, and will continue to be paid up until July 2016, as his contract included a 12 month notice period.
“Britain needs a tough, strong financial conduct regulator. The government believes that different leadership is required to build on those foundations and take the organisation to the next stage of its development,” said Chancellor George Osborne MP in making the announcement.
Mr Wheatley told the recent FCA annual public meeting:
“Frankly, I am disappointed to be moving on and I do so with sense of unfinished business. There is still work to be done but I am more convinced than ever that conduct is at the top of firms’ agenda.
“What I’d like to be remembered for is setting up a really good, solid, well-run organisation. I think we have delivered a seismic shift in the UK in terms of how people think about the relationship between the financial sector and the clients who use it. That shift has happened, and I hope it will stay that way.”
Press speculation as to the reasons for Mr Wheatley’s departure include:
• The FCA’s botched handling of the ‘closed book’ review, when millions were wiped off insurers’ share prices after it was leaked to the press that a wide ranging review of legacy policy terms was to take place. The FCA took 15 hours to issue a clarification to its earlier misleading statement on the subject
• Suggestions that the FCA has been too tough on banks for the Government’s liking, after imposing a number of multi-million pound fines for rigging of LIBOR and the foreign exchange markets. On one occasion, Mr Wheatley infamously promised to “shoot first and ask questions later” when it came to holding firms to account
• Speculation that the Government felt the FCA had not done enough to ensure adequate compensation for small businesses who were victims of interest rate hedging mis-selling. Mark Garnier, of Parliament’s Treasury Select Committee said: “The handling of interest rate swaps mis-selling and compensation clearly demonstrated how the FCA got its priorities wrong and let banks off the hook.”
How the change of chief executive will affect the way the FCA operates will become clear once a successor has been appointed. For the time being though, the way authorised firms should approach the subjects of compliance and regulation remains unaltered. The FCA’s rules, principles and guidance must still be followed at all times.
The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.