The UK Treasury has confirmed the reappointment of Nikhil Rathi as the Chief Executive of the FCA for a second five-year term until September 2030.

In a press release, the Treasury has said Rathi’s reappointment reappointment “ensures continuity of leadership” and “is critical for delivering key reforms to the regulatory environment to help boost growth and deliver the Plan for Change.”

There is also an indication that relations have improved with the FCA in recent months, with the press release saying the watchdog has “has worked constructively with the government on growth mission, with refreshed ideas such as simplifying mortgage lending rules.”

It adds that the FCA has also come up with new ideas and reforms to make it easier for firms to start and grow in the UK, another key point on the government’s growth agenda.

Backing from Chancellor

Chancellor of the Exchequer, Rachel Reeves said: “Nikhil Rathi has been crucial in this government’s efforts to reform regulation so it supports growth and boosts investment. We want the FCA to go further and faster to deliver this government’s Plan for Change and we look forward to continuing to work together to achieve this.”

Rathi himself said he was honoured to be reappointed, and called the FCA’s work vital for enabling “a fair and thriving financial services sector.”

He nadded: “I am proud of the reforms we have delivered to support growth, bolster operational effectiveness, set higher standards and to keep our markets clean and open.”

Unexpected move

IRathi’s reappointment is not something that everyone expected, given the government’s recent tone and approach towards the UK’s regulators.

Since last October, regulatory authorities including the FCA have faced a constant barrage of criticism and pressure from the government for, allegedly, not doing enough to boost growth.

Some bosses were simply removed from their positions by senior ministers, while others announced they were going to step down at the end of their current terms.

At one point Rathi directly reacted to the government’s onslaught, insisting that growth was already part of the regulator’s working agenda. He also pointed out that, despite its significance for the government, economic growth was a “secondary objective” for the FCA.

But there have been numerous hints in recent months that the watchdog was backing off from a confrontation, and aligning itself with the government’s priorities, especially around financial growth.

In one key U-turn, the regulator announced in March it was dropping a controversial plan to ‘name and shame’ companies which it was investigating for alledged misconduct.

And this week, the FCA announced a number of new steps aimed at making it easier for UK firms to innovate and test their products safely, in an effort to draw international investment and support growth.

Other steps include relaxing mortgage rules to help first-time buyers, plans to remove the £100 ($129) cap on contactless payments and making it easier for firms to meet reporting requirements.

Reactions

Not everyone seems happy with Rathi’s reappointment though, as some consumers accused the government of “being happy with the FCA’s apparent policy to not fight for consumer interests.”

In an email statement, consumer rights group Transparency Task Force said: “We haven’t seen any meaningful improvement in the FCA’s handling of consumer protection issues during Mr Rathi’s tenure thus far, and there’s no basis to be hopeful that things will change in his second term in charge.

“We can only hope that the truly transformational change that is needed at the FCA will be driven by those in Parliament tasked with holding the regulator to account, such as the Treasury Committee and the Lords Financial Services Regulation Committee,” the statement added.