Hong Kong regulatory veteran Ashley Alder has been named the next chairman of Britain’s troubled financial services firm

  • Ashley Alder currently chairs the Securities and Futures Commission of Hong Kong
  • He originally joined the SFC as Executive Director of Corporate Finance in 2001
  • Hong Kong’s FCA and SFC have been hit by massive staff resignations

The chief executive of Hong Kong’s futures and securities regulator has been hired as the next chairman of the UK’s Financial Conduct Authority.

HM Treasury has announced that Ashley Alder will take over the FCA, the government body that oversees the UK’s financial services sector, from next January for a five-year term.

He will succeed Richard Lloyd, who took up the role on an interim basis last month following the departure of Charles Rendell a year before his term was due to expire.

New boss: HM Treasury has announced that Ashley Alder will take over the FCA, the government body that oversees the UK’s financial services sector, from January next year for five years

Alder has spent the past 11 years as head of the Hong Kong Securities and Futures Commission (SFC), having originally joined the organization in 2001 as executive director of corporate finance.

He then left in 2004 to return to the law firm Herbert Smith, where he worked as a specialist in corporate and business law after moving to Hong Kong in 1989.

While at the SFC, Alder helped introduce a number of reforms and schemes to try to strengthen the city’s financial system, pushed for greater focus on climate finance and imposed significant fines on banking giants.

This included a $350 million fine against the Asian office of Goldman Sachs over bond offerings that raised money for Malaysia’s controversial sovereign wealth fund 1Malaysia Development Berhad.

But in recent years, the city-state’s appeal as an international financial center has come under massive pressure due to the coronavirus pandemic and draconian new laws restricting political freedoms.

Mass protests erupted in 2019 over a proposed extradition bill that would have allowed the region’s residents to be deported to mainland China, sending the city into recession as tourists stayed away and retailers lost business.

Challenges: The FCA has been hit by a flurry of resignations and criticism in recent years over the collapse of Neil Woodford's equity fund and London Capital & Finance.

Challenges: The FCA has been hit by a flurry of resignations and criticism in recent years over the collapse of Neil Woodford’s equity fund and London Capital & Finance.

Although the bill was repealed, the People’s Republic of China later introduced a national security law that led to the arrests of pro-democracy protesters and a wave of mass emigration.

While that happened, the SFC experienced a wave of redundancies, with 12 percent of staff and a quarter of junior professional staff leaving in 2021, according to its chairman, Tim Louis.

Britain’s FCA has itself been hit by a flurry of redundancies, with 345 staff leaving between June and October 2021, double the number of the previous year.

FCA’s union employees also voted to protest in April for the first time in the organization’s history over planned reforms to working conditions and pay initiated by chief executive Nikhil Rathi.

Ratty’s proposals included cuts to pension rights, the loss of regular payments labeled ‘bonuses’, lower pay bands for Scottish staff and cuts to postgraduate trainees.

Meanwhile, the City watchdog has faced heavy criticism over its handling of the collapse of Neil Woodford’s equity fund and London Capital & Finance (LC&F).

An independent review led by Dame Elizabeth Gloucester, a former Court of Appeal judge, admonished the FCA for insufficient regulation of LC&F, which sold unregulated “mini-bonds” promising investors big profits but collapsed owing them more than £230m.

In the Woodford case, the financial authority has faced criticism for the slow pace of its investigation, given that it began in June 2019, just weeks after the fund was suspended.

Analysts hope that the election of a new chair will draw a line under these scandals and go some way to restoring FCA’s reputation and improving employee morale.

Simon Morris, a partner at law firm CMS, applauded the FCA’s decision to hire Alder, calling it an “excellent appointment” that would give the body “a chair who knows what regulation looks like from the inside”.

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