HM Treasury (HMT) has been urged to use the appointment selection of a new Financial Conduct Authority (FCA) chair as an “opportunity” in introduce “much-needed diversity of thinking” to the FCA’s leadership team.

An open letter to the Chancellor, Rishi Sunak, from over 200 signatories led by the Transparency Task Force (TTF), said that a “very different kind of chair” would be needed to deliver on the programme previously promised by FCA chief executive, Nikhil Rathi, and ensure this amounts to “a genuine step change”.

“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 letter stated.

“The successful candidate must enjoy the unqualified support of stakeholders beyond the Square Mile.”

Charles Randell recently announced that he was stepping down from his position as FCA and Payment Systems Regulator (PSA) chair on 15 October, having been appointed chair of both bodies in April 2018.

Announcing the news earlier this month, the FCA emphasised that during Randell's time as chair, the FCA established a “significant multi-year transformation programme” and supported the UK’s departure from the EU with “minimal disruption to financial services”.

However, the letter pointed out that both Charles Randell and his predecessor, John Griffith-Jones, previously led professional services firms that served the financial services industry, noting that this resulted in accusations of a conflict of interest.

“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,” it continued.

“The harsh reality is that thousands of people have lost life-changing sums of money from their investments due to one catastrophic regulatory failure or another.”

Indeed, the letter argued that the FCA is “consistently failing” to achieve on of its most important objectives in offering appropriate consumer protection.

It also noted that the National Audit Office is now “openly pondering whether the FCA represents value for money” in relation to its consumer protection remit, with the NAO recently confirming plans for an investigation into the FCA's handling of the British Steel Pension Scheme transfer scandal.

The letter stated: “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.

“There is nothing more important for the future success of our financial services sector than for society as a whole to have trust and confidence in it. That can only happen if the FCA now does a good job in rebuilding the trust and confidence that it has lost.”

The FCA declined to comment.

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