Mr Sants will step down having completed what the FSA
described as the ‘fundamental design and delivery’ of the government’s plans to
separate prudential and conduct financial regulation in the UK.
Having become FSA chief executive in July 2007, Mr Sants originally
announced his resignation in the summer of 2010. However, in June 2010 the new
government unveiled its plans to create a ‘twin peaks’ financial regulatory
model, involving two new bodies – the Financial Conduct Authority and the
Prudential Regulation Authority.
Mr Sants was asked, and agreed, to stay on as chief
executive to deliver these plans and to help achieve an orderly transition from
the current system of regulation to the proposed future model.
This work will culminate in the creation of a new twin peaks
structure within the FSA, coming into effect on April 2. This will mirror the
split of future PRA/FCA supervisory responsibilities and aims to help create a
smoother transition to the organisations once the legislation to create them completes
its journey through parliament. They are expected to begin operating in early
Mr Sants said today: ‘When I agreed to stay on as CEO in 2010, I committed to stay and deliver an
orderly transition to the Government’s new regulatory structure. The project is
now firmly on track and with the establishment of twin peaks within the FSA I
will have achieved that goal.
‘Now is the
right time to hand over to those who will deliver the long term goals of the
future PRA and FCA.
‘I am proud of
what the FSA has achieved during my time in charge, through what have been
incredibly challenging times. I would like to thank all of my colleagues for
their dedication, support and hard work. I know I leave the organisation in
very capable hands.’
He will leave
the FSA on June 29. On his departure, Andrew Bailey will take over his role as
head of the Prudential Business Unit, which is the part of the FSA mirroring
the future PRA. Martin Wheatley will remain head of Conduct Business Unit, and
future chief executive of the FCA.
report to FSA chairman Lord Turner, who today paid tribute to Mr Sants’ in
delivering both the twin peaks model and other major reforms within the
organisation. These included an overhaul of its pre-crisis approach to
regulation and also the capital and liquidity regimes for banks.
Mr Sants also
championed the need for stronger governance and accountability within the
industry and oversaw the FSA’s transition to become an ‘effective enforcer’.
Lord Turner said: ‘The major reforms made within the FSA since the financial crisis and the
progress in delivering the government’s plan would not have been possible
without Hector. He is a truly outstanding public servant of great integrity and
has provided the FSA with dedicated leadership and focus through extremely
‘I am very
sorry to see him leave but I understand his decision, now that he has delivered
what he set out to achieve. I’d like to thank him for all that he’s done.’