Exchange seeks executive to run regulatory body: Departments to merge under umbrella

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The Independent Online
THE Stock Exchange has appointed Whitehead Mann, the headhunters, to find a top City executive to run its five separate regulatory functions, which are to be combined in a new department.

Michael Lawrence, the Exchange's new chief executive, said the plan was to bring the departments - listing, market surveillance, market supervision, membership and settlement regulation, and regulatory development - under one umbrella.

Mr Lawrence denied the Exchange was seeking to expand its regulatory responsibilities or become a wider City enforcement body. He said it would still expect to pass serious cases such as insider dealing on to other bodies.

But he said there were two areas where the Exchange would like legal powers because it had no statutory means of enforcement against those who disobeyed. These are disclosure of directors' dealings in shares and companies' obligations to seek shareholder approval when making major acquisitions or disposals.

The Exchange's only weapons to enforce observance of these rules are delisting or suspension, which are too draconian in most cases to be of much use, or a reprimand, which can be ignored. 'We would like the ability to give a more measured response,' he said. But it would require a change in the law.

In an internal memorandum on the regulatory reorganisation, Mr Lawrence told staff: 'All our regulatory functions need to be brought together in order that we can be best placed to strengthen London's position. Publicly, we have advocated greater co-ordination between regulatory bodies, and it seems only sensible to arrange our structure accordingly.'

The new department will be in charge of day-to-day contact with the market, interpretation of rules, market surveillance and investigation and checking whether companies observe the listing rules. At present, these functions have separate reporting lines.

Mr Lawrence said the Exchange would pay what it took to attract the right candidate who was likely to have a reputation in the City, be over 50 and probably experienced in securities or corporate finance. Specialist regulators such as compliance officers would not be considered, he added.

The new chief regulator will complete the reorganisation of the Exchange's management, of which the next stage is the appointment of a head of finance and planning, whose main role will be to develop a business plan and strategy for the Exchange to compete in international markets.

Mr Lawrence said he was pleased with the quality of candidates. 'I hope it will not be long before I can make an announcement,' he said.

As part of the reorganisation, Martin Hall, head of public policy and external relations, is to leave the Exchange in June and a corporate communications group under Kate Bowes is to report direct to Mr Lawrence.

Last month, Mr Lawrence also brought the Exchange's stock market, settlement and company information roles into a single department.

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