Financial Conduct Authority  

FCA's Rathi: ‘We are always open to simplifying regulation’

FCA's Rathi: ‘We are always open to simplifying regulation’
Nikhil Rathi, chief executive officer at the Financial Conduct Authority (Image credit: Chris J. Ratcliffe/Bloomberg)

The Financial Conduct Authority boss has said the regulator is always open to making regulation easier to follow, provided it does not compromise on its strategy.

Speaking at the Lord Mayor’s City Banquet at Mansion House yesterday (October 27), Nikhil Rathi, chief executive officer of the FCA said it is embedding competitiveness further into its approach. 

“Often arguments are put to us on the grounds of competitiveness that are anything but,” he said.

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“It is not our role to create or maintain barriers to entry that support short term revenues of incumbent players at the expense of new entrants.

“We are always open to simplifying regulation whilst delivering the same outcomes and streamlining our processes without undermining rigour.”

Rathi said as an independent regulator, it has shown it can act quickly, whether it was its reaction to Covid, Russia, the rising cost of living or unprecedented market turbulence.

He emphasised that it was vital this “independence and agility at speed” is not undermined by any proposed call-in power.

“While we embrace and embed a secondary mandate for growth, making it a primary mandate would clearly undermine our international standing,” he said.

Testing standards to the limit 

Rathi was appointed in June 2020 on a five-year term as chief executive of the regulator. 

He explained that during this time, he has “fundamentally reoriented the FCA”. 

“We have greater willingness to take more legal risk, to intervene earlier and to test our powers to the limits,” he said.

Referencing the three-year strategy, published earlier this year, he said it holds the FCA to account for the first time against specific outcomes and metrics.  

“We have bolstered our senior leadership, promoting our top internal talent and bringing in commercial, operational and international experience,” he said.

“We have made difficult reforms to our pay and rewards to focus more on collective and individual performance, support career mobility within the FCA and lay the ground for substantial expansion in Leeds and Edinburgh. 

“We are attracting over 1,000 new colleagues this year.”

This comes amid strikes earlier this year when three quarters (75 per cent) of Unite union members voted for the first time in favour of industrial action against the FCA over disputes around changes to pay and conditions.

Key concerns by staff included the loss of routine payments labelled ‘bonuses’ which represents 10 to 12 per cent of salary, the narrowing of pay bands, lower pay bands for Scottish staff, cuts affecting graduate trainees, and a threat of future cuts to pensions.

In the speech, Rathi said the FCA needs the extra support as its workload has increased, and remit continues to broaden. 

“We have greater willingness to take more legal risk, to intervene earlier and to test our powers to the limits,” he said.