FCA loses regulation heavyweight as McDermott exits after 15 years

FCA loses regulation heavyweight as McDermott exits after 15 years

Enforcement big gun Tracey McDermott will leave the Financial Conduct Authority (FCA) when the regulator’s new chief executive starts work in July.

The acting chief executive has been at the FCA – and its predecessor the Financial Services Authority – since 2001.

In early December 2015, she decided to withdraw from the process to appoint the permanent chief executive, but would continue as acting head of the watchdog until a permanent replacement was in post.

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Andrew Bailey was appointed as the new chief executive in January and is due to take up the position on 1 July, when Ms McDermott will leave the FCA.

Often under fire and always outspoken, Ms McDermott is a trained lawyer and spent much of her time at the regulator leading its enforcement division before and after the 2008 financial crisis, helping to bring action against a wave a high-profile financial companies.

Ms McDermott refused to pull any punches in addressing what she felt were the parts of the industry working to the detriment of consumers.

She has hit out against firms for failing to spot problems themselves and forcing the resource-stretched regulator to step in.

“I would hope to see more cases where misconduct is spotted by firms rather than by the regulator. And where it is spotted, it is identified sooner and acted on robustly,” Ms McDermott told the Financial Conference in London on 2 December 2015.

She added: “I would want more of this to be identified not by firms’ legal and compliance departments, but by those working on the front line.”

She has also defended the regulator from outside attacks, saying that as an independent body it has the right to make “difficult and important decisions” in the interests of consumers, regardless of their unpopularity among the financial services industry.

John Griffith Jones, chairman of the FCA, said: “Tracey has done a terrific job leading the FCA over the past seven months, building on the enormous contribution she has made in her various roles over the previous 15 years.

“Transitions are always challenging, and her energy and clarity of purpose have been invaluable in steering the organisation in the right direction.

“I know she will continue to lead the FCA with the same commitment until Andrew Bailey arrives in July, and I and the board are grateful for her unstinting support.”

Ms McDermott became the acting chief executive in September, when Martin Wheatley left the regulator.

She has previously been director of supervision and authorisations and before that director of enforcement and financial crime.

Adviser view

Chris Budd, managing director at Bristol-based IFA Ovation, said: “I cannot imagine heading the FCA is an easy job, and I think Tracey McDermott did it pretty well. She seemed at least willing to listen to all sides. I do look forward to the warts-and-all memoir of her time ‘in office’!”