9th May 2012

FSA Oddity- the circuit's dead, there's something wrong?

So another key RDR architect, Peter Smith, the FSA’s head of investment policy is to leave in June and will head to Dubai to join the Dubai Financial Services Authority.

He joins other high profile FSA departures including Hector Sants, Amanda Bowe, Margaret Cole, Jon Pain, Sally Dewar and Mark Norris to name but a few.

So will the last person to leave Canary Wharf turn the lights out?

Departures such as this sadly come as no surprise anymore to anyone, but in this case, some very loud alarm bells should be ringing in Westminster as so many key RDR figures are throwing themselves off the RDR train before, as many in the industry now think, it derails.

If the RDR goes well it will be “tea and cakes in Berlin” and “gongs” all round for those that are left. If it goes badly at least we as an industry will know who to blame and see responsibility taken accordingly. Sorry a moment of madness of course as the regulator does not take responsibility, silly me.

But on a serious note, the TSC should as a matter of priority call all these figures before them and get to truth surrounding their departures. After all most of them if not all, have played a very key part in the RDR design and implementation processes. To see them simply walk away before 1^st January 2013 is a manifest failure in duty and shows a distinct lack of respect for their colleagues who will be left to carry the can, and those they regulate.

With the departure of so many high profile figures who is left of any weight (no pun intended) to see the RDR job done? 
It would be somewhat ironic if the RDR was now actually delayed because there is nobody left in Canary Wharf with enough knowledge, experience and seniority to oversee the implementation.

This may be an additional unintended consequence of the unceasing “friendly” regulatory fire raining down on IFAs that now includes PI difficulties and unfair FSCS levies leaving the plans of many regulated businesses in tatters.

Or is this about loss of face? Despite Hector Sants stating at the FSA AGM in June 2010 that the then £430m RDR would go ahead, it was reported that the FSA considered scrapping the retail distribution review at a board meeting in March 2010 but decided to push on with plans for fear of "losing face".

I am sure Martin Wheatley must be asking himself why he ever got involved in what now stands a very real chance of ending in a complete mess that cannot be placed at the door of the IFA community. We all await the FSA’s promised upcoming “management structure changes” with great interest.

Peter Smith should not forget, assuming he knows, what happened to previous FSA individuals sent over to run the Dubai Financial services. 


Ian Hay Davison and Philip Thorpe were fired because its’ then chairman Anis al Jallaf did not like their advice. Hay Davison was fired by mobile telephone while the regulator's chief executive Philip Thorpe, a former managing director of the FSA, was escorted from the regulator's Dubai headquarters and their. computers were seized.

Hay Davison was quoted as saying: "I'm very disappointed that rather than listen to our advice about what was necessary to build a successful international financial centre, Mr. al Jallaf has chosen to fire us. We have been working with them over the last two years and he decided he didn't like our advice."

So for Peter Smith, who was on record as saying that if RDR failed we would need to “think of something else”, “the stars look very different today” and he may indeed find himself floating in a “most peculiar way” and hopefully not in Dubai Creek.

Regulation, Panacea Comment