How the pandemic changes the to-do list of new FCA boss

How the pandemic changes the to-do list of new FCA boss

The fallout from Covid-19 should place a number of new items at the top of the incoming Financial Conduct Authority chief executive Nikhil Rathi’s list. 

Mr Rathi’s appointment to head the City regulator was confirmed on June 22, and was something of a surprise.

He joins from the London Stock Exchange Group, where he was the chief executive of the UK business, having previously worked in the offices of Tony Blair and Gordon Brown, when both were prime ministers. And he has also worked in HM Treasury.

During an 11-year career at the Treasury, he worked on issues relating to the banking crisis, where he headed the financial stability unit and later served as director of the Financial Services Group – the body within the Treasury that deals with the UK’s relationship with the EU. 

Key points

  • Mr Rathi has been appointed chief executive of the FCA.
  • He had a good track record at HM Treasury.
  • He will have to deal with the fallout from Covid-19.

Lord (Nicholas) Macpherson, who served as permanent secretary to the Treasury from 2005 to 2016, covering the period of the global financial crisis, worked with Mr Rathi during that time. 

He says: “Nikhil was one of the most able officials I worked with. He was in the lead in resolving RBS in 2008 and made a big impression on the ministers, bankers and lawyers he worked with. 

“He has a sharp intellect, is a good communicator and is very personable.”

Mr Rathi also worked in the Treasury during the years of the coalition government, while Vince Cable was secretary of state for business. Sir Vince told Financial Adviser he remembers – from his limited dealings with Mr Rathi – that he was a “very clever official.” 

Mr Rathi left the Treasury in 2012 to join the London Stock Exchange Group, and became that company’s UK chief executive in 2015; LSEG has recently fought off a takeover attempt by the Hong Kong stock exchange, while at the same time trying to acquire data company, Refinitiv – a deal which is still pending. 

Mr Rathi joins the FCA at a time when the regulator has received criticism for what many believe is its slow response to problems, including the marketing of mini-bonds to retail investors, the collapse of Woodford Investment Management, and the rise in adviser professional indemnity insurance.

Mike Barrett, consultant at the Lang Cat, says the challenge for the new boss “is to show he can be ahead of events, starting with the pandemic.

“We don’t know precisely what the impact of that will be on the issues that come under the FCA remit, but we know that there will be an impact, and it’s a question the regulator should be asking now, rather than later.

“It may be that Mr Rathi’s private sector experience makes the organisation more dynamic.” 

Mr Barrett adds: “If I had this job, the main thing I would want to be addressing is the speed of reacting to emerging issues.