Scam victims and whistleblowers have urged chancellor Rishi Sunak to ensure the selection process for the next Financial Conduct Authority chair is “open and transparent” so that the role does not go to “another conflicted City insider”, in an open letter coordinated by the Transparency Taskforce.
The request comes in light of Charles Randell’s early departure as FCA chair. Randell will be stepping down from the role next spring, a year before his five-year term was due to end.
The 200 co-signatories include whistleblowers and victims affected by a number of high-profile scams, including LC&F, HBOS and Connaught.
Randell’s resignation “provides an opportunity to introduce some much-needed diversity of thinking to the FCA’s leadership team at a time when the regulator’s competence and integrity are rightly in question”, the letter said.
‘This crucial role cannot go to another conflicted City insider’
The Transparency Task Force argued a “very different kind of chair is required” to ensure the FCA makes good on its transformation programme promised by chief executive Nikhil Rathi.
“To achieve this, this crucial role cannot go to another conflicted City insider whose name emerges from an opaque process conducted solely by the Treasury. The successful candidate must enjoy the unqualified support of stakeholders beyond the Square Mile.”
Randell was a partner at magic circle law firm Slaughter and May from 1989 to 2013. His predecessor John Griffith-Jones also worked in professional services firms that serve the City, the Transparency Taskforce said.
“Whether they were conflicted is a matter of debate but there can be no doubt that neither used his term in office to remedy long-standing and widely acknowledged deficiencies in the regulator.”
Consumers should be represented on appointment committee
The FCA has been marred by a series of scandals in recent years, including the implosion of Neil Woodford’s equity income fund, which happened under Randell’s watch and while Bank of England governor Andrew Bailey was chief executive.
Last year two damning independent investigations into the FCA’s handling of the London Capital Finance (LCF) mini-bond mis-selling and the collapse of the Connaught fund also revealed a raft of serious regulatory failures.
As such, the lobby group has urged HM Treasury to collaborate with it and other financial services consumer and whistleblower activists to establish an “open and transparent selection process”.
The letter continues: “We do not seek to undermine the HMT’s statutory right to appoint a new chair to the FCA but propose that it works with us to ensure that at least half the membership of the appointment committee reflect consumer, rather than producer, interests. We also suggest that the new chair’s job description reflects consumer protection as a top priority.”
See also: FCA promise to do better receives lukewarm reception from industry
