FCA's enforcement and market oversight director to step down

Mark Steward has announced he will be stepping down as the FCA’s executive director of enforcement and market oversight after seven years with the regulator.

The FCA recently came under criticism after a BBC Panorama investigation into the Blackmore bond, which collapsed in 2020 leaving around 2,000 people facing a £46 million loss.

Andy Agathangelou, founder of Transparency Task Force, believes Steward's position "became untenable" following an interview he gave in the Sunday Times in which he claimed that the FCA had no powers to act in respect of the Blackmore Bond scandal and that the regulator cannot protect consumers from "the risky consequences of every investment decision".

Agathangelou believes that "the situation had to be addressed following his admission in the regulator’s Annual Public Meeting on 12 October that it did in fact have such powers all along, and is now using them, albeit five and a half years too late".

Andy Agathangelou added: "The FCA has been underperforming, opaque and unaccountable for a long time. Mark Steward’s departure is the latest in a series of high-profile resignations, many of them linked to notorious cases of regulatory failure. While we think it’s right that he’s going, we don’t believe that the regulator’s shortcomings are tied to the actions or inactions of specific individuals; we blame the culture, and the lack of transparency and accountability. We are proposing a modest package of reasonable measures, which can easily be introduced as amendments to the forthcoming Bill, which we believe will finally address these underlying problems and put the FCA on a path toward genuine reform. We call upon the City Minister, Andrew Griffith, to meet with us to discuss how they might be incorporated into the next draft of the Bill.’

Discussing Steward's departure, Nikhil Rathi, chief executive of the FCA, said: "Mark has brought his formidable experience as a regulator and as a litigator to the FCA delivering significant enforcement cases across a broad spectrum, as well as the FCA’s data-led approach to market oversight.

"That enormous contribution is a result of Mark’s abiding belief in fairness, that markets must be clean if the economy is to thrive and in doing the right thing on behalf of consumers. He has shown that the FCA is willing to take on challenging cases, will use the full extent of our powers and will deliver results that have a real impact for the markets we oversee and for those who rely on them."

Nathan Willmott, Partner at Ashurst LLP, commented: “He is the last member of the FCA executive team to survive since Nikhil Rathi took over as CEO.

“Shortly after Mark Steward took on the role he lowered the FCA's threshold for referring cases to Enforcement for formal investigation, and throughout his tenure the FCA has struggled to handle this increased caseload without an increase in numbers of investigators. As a result, the length of time it takes for the FCA to complete an investigation has gone up and up. That is not good for the FCA or for those firms and individuals placed under investigation. This is what he will be most remembered for.

“Mark Steward also split the role of investigator and decision-maker on investigations, creating Project Boards whose job it is to review the progress of the investigation and make decisions on the conduct of the investigation. This has moved decision-making further away from those with knowledge of the facts, and has further slowed the conduct of investigations.

“Mark Steward is to be applauded for introducing 'focused resolution agreements', under which a firm or individual under investigation can agree the factual findings and regulatory breaches but contest the level of financial penalty – but still qualify for the 30% early settlement discount. This has made the process fairer to those under investigation.

“Under Mark Steward the FCA has had a real focus on taking action to reduce financial crime – with a particular focus on the steps that financial institutions are required to take to detect and prevent market abuse, money laundering, bribery, sanctions breaches and fraud. He will view his highpoint as achieving a criminal guilty plea from NatWest in relation to its AML systems and controls. He has had some real success in getting banks and other financial institutions to take their role in policing financial crime more seriously.

“Mark Steward is also to be applauded for pioneering a more data-led approach to market oversight, which is continuing to be developed at the FCA.

“The FCA under Mark Steward has certainly made senior management at large financial institutions feel that the risk of being placed under investigation is now a real one rather than a theoretical one, despite the fact that the FCA has found it difficult to convert their investigations into financial penalties against senior managers."