The 40-year-old will be the first BAME leader of the City regulator
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The London Stock Exchange boss Nikhil Rathi has been appointed chief executive of the Financial Conduct Authority, making him the first BAME leader of the UK’s City regulator.
The Treasury announced Rathi’s appointment on Monday, formally replacing Andrew Bailey, who led the watchdog for almost four years years before becoming the governor of the Bank of England in March. Christopher Woolard, the FCA’s executive in charge of competition, has been serving as the interim boss since January.
Rathi is the first BAME boss to lead Britain’s financial regulator, including the Financial Services Authority, which was replaced by the FCA in 2013. The lack of BAME leadership has come under increased scrutiny in the wake of the Black Lives Matter protests, sparked by the killing of George Floyd while in the custody of Minneapolis police last month.
A survey published on Monday by Business in the Community, a network dedicated to responsible business, found that BAME professionals made up only 10.3% of the 3.7m leadership roles across the public and private sector last year. However, people of black and minority ethnic backgrounds make up about 14% of the UK population.
Commenting on Nikhil’s appointment, Business in the Community’s race equality director, Sandra Kerr, said: “Diverse appointments to key roles in the financial sector help to shift the dial for representation at all levels. This is a crucial time for decision-makers in boardrooms across the country and a diverse and inclusive workforce will strengthen businesses’ capacity for making the right decisions as we enter the recovery phase of the Covid-19 pandemic.”
Rathi, who is of British-Asian background, has been the chief executive of the London Stock Exchange since 2015 and was well known to officials in the Treasury, where he served as a director of its financial services division for five years from 2009.
Commenting on his appointment, the 40-year-old said: “In the years ahead, we will create together an even more diverse organisation, supporting the recovery with a special focus on vulnerable consumers, embracing new technology, playing our part in tackling climate change, enforcing high standards and ensuring the UK is a thought leader in international regulatory discussions.”
The former FCA board member Mick McAteer said that Rathi’s appointment was a “very big statement” on the regulator’s priorities post Brexit, given his background in international financial services. Between 2009 and 2014, Rathi led the Treasury’s work on the UK’s EU and international financial services interests and served as the London Stock Exchange Group’s international development executive.
McAteer said: “It sends a powerful signal that the FCA is likely to become more internationally focused in the post-Brexit world. The regulator is likely to play a bigger role in protecting the City as a pre-eminent international financial centre, given the potential loss of business post Brexit.”
However, the former regulator said it was important that consumer protection remained a top priority. “For years, prior to the FCA being created, consumer protection played second fiddle to financial stability and market regulation. Campaigners will need to be on their guard to make sure that this does not happen again.”
Rathi will now prepare for a grilling by MPs from the Treasury select committee, as part of a pre-commencement hearing to be scheduled before he takes up the role in the autumn.
He will be paid an annual salary of £455,000 at the FCA, plus a pension worth about 12% of his basic pay. That is higher than his predecessor, Bailey, who was on a salary of £449,000, plus pension pay worth about 9%. However, Bailey also received bonuses and other benefits that bumped his total package up to £589,000 for the year to March 2019. Rathi will not be entitled to a bonus or paid any other benefits.
The chancellor, Rishi Sunak, said: “We have conducted a thorough, worldwide search for this crucial appointment and, through his wide-ranging experiences across financial services, I am confident that Nikhil will bring the ambitious vision and leadership this organisation demands.”