NIKHIL RATHI is the chief executive officer of the Financial Conduct Authority (FCA), the City watchdog which sets out its role in its mission statement: “We secure an appropriate degree of protection for consumers. We protect and enhance the integrity of the UK financial system. We promote effective competition in the interests of consumers.”
He intends to tackle such matters as fraud and pension scams, promote diversity and get companies to deal with the consequences of climate change. He also wants to ensure that people’s credit ratings are not adversely affected as a result of taking out mortgage holidays during the pandemic.
Rathi, who is a vegetarian from a Gujarati family, has effectively gone from one top job to another. Since 2014, he had been the chief executive officer at the London Stock Exchange plc, as well as director of International Development at the London Stock Exchange Group.
He developed close links with India. Indeed, he became a familiar figure in Indian circles because on numerous occasions, he ceremonially launched Indian “masala bond” when the London Stock Exchange opened at 8am.
On June 22 last year, he had been appointed the new CEO of the FCA, in succession to Andrew Bailey who had left to become governor of the Bank of England. The acting CEO of the FCA, Christopher Woolard, had also applied for the job. However, chancellor Rishi Sunak, who made the appointment, said that Rathi was “the outstanding candidate”.
Rathi already had experience of working closely with the FCA, having sat on its markets practitioner panel since 2015. It so happens the chancellor and Rathi are similar in some respects. For example, both Sunak and Rathi got Firsts in PPE at Oxford. They are also of a similar age. Sunak, a Punjabi, was born on May 12, 1980, Rathi on August 5, 1979.
The latter was also the Cumbria under-12 tennis champion. Rathi served as a private secretary to prime ministers Tony Blair and Gordon Brown between 2005 and 2008. He then worked for HM Trea-sury from 2009 and 2014, and was director of the financial services group, leading the UK’s EU and international financial services interests.
“According to Treasury colleagues, Mr Sunak was impressed by Mr Rathi’s ‘fresh thinking and energy’ and his ability to run an organisation,” the Financial Times reported. “Mr Sunak was particularly struck by the fact that Mr Rathi forged his reputation at the Treasury in the aftermath of the 2008 financial crisis, including helping to resolve the near-collapse of RBS (Royal Bank of Scotland).”
The FT pointed out: “Mr Sunak’s allies said Mr Rathi was ‘supremely capable’ but the chancellor was also pleased to have appointed a candidate from an ethnic minority background to run one of the country’s big financial institutions.”
Rathi has said after his appointment to his £455,000 a year job: “I am honoured to be appointed chief executive of the Financial Conduct Authority. I look forward to building on the strong legacy of Andrew Bailey and the exceptional leadership of Christopher Woolard, and the FCA executive team during the crisis.
“My FCA colleagues can be very proud of their achievements in supporting consumers and the economy in all parts of the UK in recent months.“ 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.”
Rathi began his five-year term at the FCA at the beginning of October last year. He is eligible to be appointed for a second term.
He has already been grilled twice by the Treasury select committee at the House of Commons. The first occasion was on July 22, 2020,
when he told MPs that the FCA has “an exceptionally broad remit, which has evolved considerably in recent years, with now 60,000 firms under its supervision”.
One of his priorities would be to deliver on “diversity in all its dimensions”.
“The FCA is dealing with some complex policy problems and diversity of thought is going to be critical to deal with those problems, as well as diversity across all the important dimensions – so progress on the Women in Finance charter and the work that is being done now on black and minority ethnic leadership,” he says.
He adds: “I believe there will be issues to be discussed around unconscious bias, and I think the Black Lives Matter movement has really touched a nerve in many organisations, with colleagues beginning to speak much more openly about these issues. Becoming comfortable about having uncomfortable conversations in large organisations is going to be very important in coming months and years to address these issues, as is making sure that talented colleagues have strong mentoring.
“I think there could be an intelligent review of recruitment processes as well. I am open-minded about mechanisms such as no-name shortlisting, in which you have the CV but do not have the name on top, for example, to make sure that shortlisting is completely based on merits and qualifications.”
In a second meeting with the MPs on November 4, 2020, he spoke of his determination to deal with pension scams. He returned to the subject of diversity in a speech to the City Regulators at Mansion House on November 12, 2020 in the presence of the Lord Mayor: “We also have much work to do on diversity and inclusion at the FCA, delivering on the Women in Finance Charter and recognising the immense importance of an organisation like ours reflecting the communities we serve in all parts of the UK with genuine diversity of thought brought to bear on the complex problems we are trying to solve.”
Another priority would be climate change,which he had explained three days earlier when he had addressed an online conference hosted by the City of London: “While we deal with the (Covid) crisis immediately surrounding us, we cannot lose sight of the climate crisis ahead. That the last five years are the hottest on record only serves to underline the scale of the climate challenge. To tackle it, we need to accelerate the transition to cleaner energy and a less carbon-intensive economy,” he says.
“From January 1, we are introducing rules requiring premium listed companies to make better disclosures about how climate change affects their business.
“We want green and sustainable finance to be at the heart of the continued growth of London as a global financial centre.”
