The UK’s Financial Conduct Authority has named Ashley Alder as its chair after criticism of how it handled a series of scandals in recent years.
Alder, currently the chief executive of Hong Kong’s securities watchdog, will take over from interim chair Richard Lloyd in January 2023, said HM Treasury.
The appointment marks a fresh start for the FCA, which has faced a backlash over its slow response to two large consumer scandals in 2019: the £236mn collapse of London Capital & Finance, which pushed unregulated minibonds on retail investors, and the implosion of Neil Woodford’s flagship equity fund.
Charles Randell, a former Slaughter and May lawyer, stepped down as chair of the FCA in May, around a year before the end of his five-year term. He began a transformation of the agency after the controversies.
Nikhil Rathi took over as the FCA’s chief executive in 2020, replacing Andrew Bailey, who became governor of the Bank of England. Rathi’s overhaul of the regulator has triggered a backlash, including strikes over pay and working conditions.
Alder has led Hong Kong’s Securities and Futures Commission for 11 years. His exit from the SFC about eight months before his term was due to expire will mark one of the most senior departures yet in an exodus from the city’s financial community.
Alder was granted a new three-year term in 2020 to steer the city’s financial services industry through the coronavirus pandemic. Business in Hong Kong has been hit hard by Covid-19 quarantines and other restrictions.
The FCA chair is appointed by the Treasury and typically requires the approval of the UK prime minister and chancellor. It is unclear whether Alder’s appointment could be affected by political turmoil following the departure of Boris Johnson.
Alder said he would “value the opportunity to contribute to a crucial phase in the FCA’s history as it helps chart the UK’s post-Brexit future as a global financial centre which continues to support innovation and competition through its own world-leading regulatory standards”.
About Hong Kong, he said: “My successor will inherit a solid and effective regulatory framework which underpins Hong Kong’s success as an international financial centre.”
He will leave the SFC at a challenging time for Hong Kong’s reputation as a global financial hub, which has been hit by Beijing’s tightening control over the city and draconian response to the pandemic. Financial services contribute more than a fifth of the territory’s gross domestic product.
Alder moved to Hong Kong from the UK in 1989 as a lawyer at Herbert Smith, later becoming the head of the firm’s Asia region. Since becoming chief executive of the SFC in 2011, he has also taken up a role as chair of the International Organisation of Securities Commissions. The SFC will begin a recruitment process to appoint his successor, it said.
As with many of the financial firms its supervises, the SFC has grappled with a brain drain amid a record population drop in Hong Kong. About 12 per cent of its employees, including 25 per cent of its junior professional staff, left the SFC last year, it said previously.