June 2022 Newsletter

Compliance quote of the quarter

Ben Mason, CEO, My Compliance Centre
29 June 2022

My quote of the quarter is from no less a luminary than the CEO of the FCA himself, Nikhil Rathi.

I have picked this because of what lies behind it. The same message has been made time and time again over the last couple of years: the FCA is deadly serious about its statutory objectives.

But the way in which this one liner was phrased made me sit up. It is really stark.

Mr Rathi, as reported on the FCA website says Post-Brexit, if you are a predominantly UK business, your regulated entity should be here to protect investors and the integrity of the markets.”  The implication is that the primary purpose of having a business in the UK is to protect investors and market integrity.

Mr Rathi was once CEO to the London Stock Exchange. He knows better than anyone that commercial organisations are here primarily to generate returns for shareholders. That needs to be done legally and compliantly and other stakeholders taken into account, but the primary purpose is to deliver shareholder returns (and regulators generally are fine with ‘fair profits’ being made).

And Mr Rathi is now CEO of the FCA, so he also knows that it is the FCA’s purpose to protect investors and the integrity of markets.

By telling firms that the FCA’s objectives and their own are the same, he is putting down a strong marker.

Am I nit picking? A few minor changes to Mr Rathi’s wording would fix this issue – so, yes, I am being pedantic, and I admit that normally I would not have picked up on this point. However, I just think that again the FCA is stating a clear message and never have firms been so much at risk if they do not take their obligations seriously. To see the FCA’s CEO restate the purpose of regulated firms strongly underlines their position. We have all been warned!

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