The government believes that “different leadership” is needed to take the Financial Conduct Authority forward, following the FCA’s earlier announcement that chief executive Martin Wheatley will be leaving the watchdog.
Earlier today (17 July) the FCA revealed Mr Wheatley, who famously said he would “shoot first” and ask questions later, would step down as chief executive in September.
The City watchdog confirmed to FTAdviser that Mr Wheatley’s term on the board was up for renewal in March and chancellor George Osborne decided not to renew it.
Mr Osborne said: “Britain needs a tough, strong financial conduct regulator. Martin Wheatley has done a brilliant job of launching the FCA in tough circumstances.
“Now that phase is complete, the government believes that different leadership is required to build on those foundations and take the organisation to the next stage of its development.
“The government is launching a worldwide search; Martin’s replacement will – like him – need to be passionate about protecting consumers, promoting competition and completing the job of cleaning up the City, so it is the best-regulated market in the world.
“I am pleased that Tracey McDermott has agreed to take on the role of acting chief executive and I look forward to working with her.”
Simon Morris, a financial services partner at law firm CMS Cameron, said: “It is always surprising to when a chief executive steps down for no stated reason, all the more so when it’s from the FCA.
“It’s difficult to believe that running a major regulator has lost its charm after so short a period, and the need to appoint an interim rather than ensure an orderly succession makes it look like there has been a major falling out.
“Why is guesswork, but this may be linked to last year’s disastrous selective press briefing, for which many thought the chief executive should have accepted responsibility rather than let subordinates resign.
“Or it may reflect tensions within the Treasury or the Bank of England. Whatever the reason, this is an undignified end to a regulatory career, and one that raises more questions than we have yet been given.”
At the end of last year, the FCA published the report of Clifford Chance partner Simon Davis’ on handling of the press briefing. The report was highly critical, stating that the regulator handled it in a manner that was “high risk, poorly supervised and inadequately controlled”.
The inquiry examined the events leading up to and following the publication of the FCA’s intention to review certain long-term life assurance products on 27 and 28 March on the Telegraph’s website and newspaper. The report also revealed that quotes in the article were attributed to former FCA director of supervision Clive Adamson, who stepped down earlier this year, without his knowledge.
Following the article’s publication, billions of pounds were wiped from listed insurance companies, with the panic only subsiding when the FCA eventually published a clarification more than six hours after markets opened.
Earlier this month it was revealed Mr Wheatley was paid more than £700,000 for the year to the end of March, compared with £610,000 last year - the increase being mainly down to him waiving his bonus following the closed-book scandal in 2014.
Meanwhile, head of enforcement Tracey McDermott - who has agreed to act as Mr Wheatley’s temporary replacement - was paid £475,000 during the last 15 months, up from £329,000 during the last period.
Ms McDermott first joined the enforcement division of the Financial Services Authority back in 2001. She graduated in law from Queen Mary and Westfield College at the University of London and subsequently qualified as a solicitor in 1995 specialising in commercial litigation.
During her career she has worked in law firms in the UK, US and Brussels.
She headed up various departments across the enforcement and financial crime division leading teams responsible for investigations across the spectrum of the FSA’s regulatory responsibilities including market abuse, insider dealing, retail misconduct and unauthorised business.
She became director of the enforcement and financial crime division in April 2011.
On creation of the FCA in April 2013 she was appointed to the FCA board and became director of supervision – investment, wholesale and specialists in April 2015.
emma.hughes@ft.com
Additional reporting by Donia O’Loughlin
