FCA hires law firms, headhunters as vacancies increase
The Financial Conduct Authority is hiring private law firms to help process applications and has spent nearly Â£ 1million on headhunters this year as it struggles to process nearly double its typical number of vacancies after a wave of departures.
The news comes after the head of the UK’s financial services watchdog Nikhil Rathi defended his transformation plan before the Treasury Select Committee last Wednesday, telling them that while there would be ” noise “about the changes for some time to come, the regulator was heading in the right direction.
Rathi’s team has elicited a fierce reaction from staff to attempts to change FCA’s working practices and compensation structures, efforts that management believes will result in a more efficient regulator and better placed to deal with it. prevent future scandals like the 2019 implosion of London Capital & Finance, which cost 12,000 savers. Â£ 236million.
The grievances of FCA staff members have been publicly released by union Unite, which is pushing for represent them. A person familiar with FCA operations said vacancy levels are now around 500, down from typical levels of 300. FCA staff are around 4,000 people.
Against this backdrop, the financial watchdog announced contracts for consultants to take over, including a recent tender for lawyers to help with “change of control” requests that financial services firms are filing. when their ownership changes.
FCA stressed that “the final decision on an application will be made by a member of FCA staff.” The regulator attributed the need for external resources to an “increase in the number of change of control requests”.
âIn order to ensure that we can deal with them as quickly as possible, while maintaining our high standards, we have used short-term resources to support ourselves,â added the FCA. Change of control requests are deemed approved if they are not processed within 60 days, so the regulator cannot afford a stack.
Regulated companies and their attorneys have complained about delays in other areas of the FCA’s work, including a lawyer who told the Financial Times the time taken for some requests was the longest he could remember in a decade .
âThere is a very real feeling that the FCA is dangerously understaffed in some key areas, mainly areas that actually provide a service to authorized persons (regulated firms),â the lawyer said.
Last July, Rathi said he was adding 100 employees to his permissions division. On Wednesday, he told the Treasury select committee that the FCA is deliberately giving companies a more rigorous assessment.
The third-party law firm for change of control requests, which has not yet been appointed, will be used for a maximum of six months and will involve a maximum of 17 people.
The government tenders website also details nearly Â£ 1million in headhunter spending to bolster the FCA ranks after a string of no-shows, including last week’s by Megan Butler, former head of the FCA transformation project.
The Â£ 1million was spread across 12 different executive search tenders to fill positions such as directors, department heads, general counsel and chairman of the FCA consumer panel. The most important was a Â£ 155,000 contract to find a new CFO and head of the finance division.
In 2020, the FCA only advertised headhunters three times, for a total bill of almost Â£ 400,000, according to notices posted on the government procurement website.
During the Treasury Select Committee hearing, Rathi said the FCA’s attrition levels for 2021 were not unusually high and that it faced the same pressures as commercial firms in a US market. intense employment. Several current and recently departed FCA insiders told the FT that staff had left due to fallout from the transformation plan.