NIKHIL RATHI’s job as chief executive of the UK’s Financial Conduct Authority is to protect customers from bent businesses, ranging from online scammers to companies that put out misleading advertisements and funeral directors who exploit grief stricken families when they are at their most vulnerable. He has also helped the government impose sanctions against Russian individuals and organisations.
He acknowledged that 2022 “has been a difficult year for many people who have been struggling with the cost of living. So it is all the more important that financial companies meet our standards and treat their customers fairly, particularly those who are facing financial difficulties.”
He said that “as well as protecting consumers and supporting the vulnerable, we have been dealing with unprecedented market events and reviewing our rules to ensure our regulatory regime is fit for the future. We are working on reforms to the way companies are listed in the UK, which will support growth and competitiveness and continue to support innovative and fast-growing companies.
“We are pleased to have welcomed over 1,000 new colleagues to the FCA and to have opened our new office in Leeds and accelerated our expansion in Edinburgh.”
He also said: “We continue to live through an exceptionally challenging external environment, bringing into sharp focus the important role played by an independent, assertive, and agile regulator. We have been facing once-in-100-year events every few months recently.
“We mobilised to support consumers, markets and businesses during the pandemic and it is fair to say we have not stopped.”
Actions included “responding rapidly, working with domestic and international partners on the implementation of sanctions following the Russian invasion of Ukraine; monitoring extreme movements in energy and commodities markets. And most recently, working with the Bank of England, the Pensions Regulator and other authorities to monitor the impact of the significant repricing of gilts, particularly on market functioning and defined benefit pension funds. This unprecedented level of repricing affects market levels of interest rates, used to price mortgages and consumer lending and therefore millions of consumers’ household budgets.”
He also said: “Buy Now, Pay Later firms and platforms like Google have changed their policies following our intervention. We look forward to tech giants such as Meta moving more quickly to block scams on their platforms. We know scams such as Authorised Push Payment fraud and money mule enticements are on the increase. So, we have been holding hackathons and other collaborative events to devise solutions for these new challenges.
“On crypto, we have recognised the potential of blockchain technology and rigorously applied new money-laundering standards. At the same time, we have continued to warn customers they must be prepared to lose all their money if they put their money into cryptoassets.
“We have seen 600,000 people paying less interest because of our work on persistent credit card debt. We have also made sure there have been changes to insurance pricing, where customers are no longer penalised for their loyalty.
“We also started regulating funeral plan companies after having to crack down on rogue firms that took advantage of customers who were at their most vulnerable.
“We will continue to strive to protect consumers from harm, ensure market integrity and foster innovation so our economy can grow even in the face of these expanding responsibilities.”
His is clearly a senior job because the FCA’s last CEO, Andrew Bailey, left to become governor of the Bank of England. Rathi was appointed to his £455,000 job in June 2020 by Rishi Sunak, who was then chancellor of the exchequer. It might have looked as though one top Indian was giving a leg up to another top Indian but Sunak clarified that he considered Rathi to be “the outstanding candidate”.
Sunak is Punjabi, Rathi a vegetarian Gujarati. Rathi grew up in Barrow-in-Furness, Cumbria, the son of Madhu and Dr Rajendra Rathi, a local magistrate. He was educated at Chetwynde School, followed by St Anne’s College, Oxford, where he earned a first class degree in Philosophy, Politics and Economics. He was the Cumbria under-12 tennis champion.
The two have some features in common; Sunak also took a First in PPE at Oxford. The two men are of a similar age. Sunak was born on 12 May 1980, Rathi on 5 August 1979.
Rathi served as a private secretary to prime ministers Tony Blair and Gordon Brown between 2005 and 2008. He then worked for HM Treasury from 2009 and 2014, and was director of the financial services group, leading the UK’s EU and international financial services interests. 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.
When he took as CEO in October 2020, Rathi pledged to bring about greater diversity, both in the FCA and in boardrooms across Britain: “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.”
That is a promise he is trying to keep. In his three-year strategy for the FCA, he has outlined plans to achieve greater diversity in the work place, both in relation to women and also the ethnic minorities.
The FCA said that it had “finalised rules requiring listed companies to report information and disclose against targets on the representation of women and ethnic minorities on their boards and executive management, making it easier for investors to see the diversity of their senior leadership teams.
“The FCA’s approach sets positive diversity targets for listed companies. If they cannot meet them, they need to explain why not. This approach allows flexibility for smaller firms or those based overseas. The rules also allow companies to decide how best to collect data from employees to show they are meeting the targets.”
One requirement is that “at least 40 per cent of the board should be women”.
Another was that at least one of the senior board positions (Chair, Chief Executive Officer (CEO), Chief Financial Officer (CFO) or Senior Independent Director (SID) should be a woman. And at least one member of the board should be from an ethnic minority background excluding white ethnic groups.”
Rathi is married, with three children, and lives in London. He is obviously a candidate to be governor of the Bank of England.
