Sally Dewar, FSA board member and managing director of risk announced her resignation in early June to enable her to pursue “new opportunities”.
Jon Pain, another board member and managing director of supervision handed in his notice on the 29th June, and was followed swiftly by Mark Norris, chief operating officer and managing director who quit on the 1st July.
A freedom of information request issued to City law firm Reynolds Porter Chamberlain today showed the total number of FSA staff quitting the organisation has more than doubled in the past year, jumping 128% in Q2 2010 on the same period last year.
The legal firm said the rush of staff leaving the FSA will prompt concerns among financial services firms that it will take longer to get regulatory approval from the FSA on key issues such as launching a new business or appointing senior personnel.
It also warned that the quality of decision making by the FSA might decline.
Jonathan Davies, partner at RPC, added: “The FSA’s staff have been leaving in droves because of uncertainty over the regulator’s future. This kind of exodus cannot have a positive impact on the FSA’s ability to function.”
RPC recently reported that businesses are having to wait longer for FSA authorisation with the average number of weeks it takes the FSA to decide whether to authorise a company to do financial services work jumping 71% last year, up from 11.4 weeks (Q1 2009) to 19.5 weeks (Q1 2010).
Davies said: “The FSA has been taking longer and longer to authorise financial services firms and with this number of people leaving, authorisations and other regulatory functions are likely to take even longer.
“The FSA will exist in its current form for at least another six months and will no doubt have to make decisions that will have a major impact on regulated businesses. They will want to know that the best possible personnel are working on their cases.”
“Businesses often complain that just as their FSA supervisor gets to know their firm he or she moves on. The huge increase in resignations suggests this must be happening more frequently.”
The FOI request also revealed that 183 staff resigned from the FSA in the first six months of 2010 (to July 2), which is already more than for the whole of 2009 when there were 180 resignations.
Davies added: “There’s a real risk that the FSA could be left rudderless because its staff are leaving at every level of seniority, from all three managing directors at the very top to other managers, supervisors and even administrators.”
There were 69 resignations from the FSA in the two months after the election (May 6 2010 to July 2 2010) as it became clear that dramatic changes to the FSA would be made.
